Academic journal article Social Security Bulletin

The Retirement Prospects of Divorced Women

Academic journal article Social Security Bulletin

The Retirement Prospects of Divorced Women

Article excerpt

For decades, policymakers have discussed how to remedy the high poverty rates of older widows. Yet older divorced women are more likely to be poor than older widows, and historical divorce and remarriage trends suggest that in the future a larger share of retired women will be divorced. This article uses the Social Security Administration's Modeling Income in the Near Term (version 6) to project the retirement resources and well-being of divorced women. We find that Social Security benefits and retirement incomes are projected to increase for divorced women and that their poverty rates are projected to decline, due in large part to women's increasing lifetime earnings. However, not all divorced women will be equally well off; economic well-being in retirement varies by Social Security benefit type.

Selected Abbreviations

GenX generation X

MINT6 Modeling Income in the Near Term, version 6

PIA primary insurance amount

SIPP Survey of Income and Program Participation

SSA Social Security Administration

Introduction

The high poverty rates of older widows have drawn the attention of policymakers and the media, and widows have been the focus of much of the research on older women's economic well-being (Angel, Jimenez, and Angel 2007; McGarry and Schoeni 2000; Sevak, Weir, and Willis 2003/2004; Weir and Willis 2000). However, among older women, those who are divorced have dramatically lower incomes and higher poverty rates than widows and most other Social Security beneficiaries (Weaver 1997). According to recent data, around 20 percent of divorced women aged 65 or older live in poverty, compared with 18 percent of never-married women and 15 percent of widowed women. Differences in poverty rates are even larger at the oldest ages-22 percent of divorced women aged 80 or older are poor, compared with only 17 percent of never-married women and 15 percent of widowed women (SSA 2010).

Older women are much more likely to be married or widowed than they are to be divorced or never married. Currently, only about 11 percent of women aged 65 or older are divorced and only 4 percent have never married. By contrast, 41 percent of women those ages are widowed (SSA 2010). Recent trends suggest that those proportions could change in the future. Divorce rates increased sharply between the 1960s and early 1970s. After falling slightly, rates leveled off in the mid-1980s; but in a historical context, they were still relatively high (Ahlburg and De Vita 1992; DaVanzo and Rahman 1993; Goldstein 1999; Norton and Miller 1992; Stevenson and Wolfers 2007). Most individuals who divorce will remarry, but the remarriage rate has decreased, and second marriages also often end in divorce (Norton and Miller 1992).

Although the divorce rate has leveled off and may even have begun to reverse (NCHS 1991; Stevenson and Wolfers 2007; Tejada-Vera and Sutton 2010), the characteristics of divorce have been changing. In particular, the duration of marriages ending in divorce appears to have declined among more recent cohorts of women. Among first marriages, the share of women who were still married at their fifth anniversary declined from 93.0 percent for those married 1960-1964 to 87.1 percent for those married 1990-1994. The share of those who remained married at their tenth anniversaries declined from 82.8 percent for those married 1960-1964 to 74.5 percent for those married 1990-1994 (Kreider and Ellis 2011).

These divorce and marriage-duration trends suggest that, over time, increasing proportions of women will be divorced when they reach retirement, which has implications for their retirement security generally and their Social Security benefits specifically. A number of studies have already documented the potential effect of divorce and marriage trends on Social Security benefits for future women retirees (Butrica and Iams 2000; Harrington Meyer, Wolf, and Himes 2006; Tamborini and Whitman 2007; Tamborini, Iams, and Whitman 2009). …

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