How does women working affect social security replacement rates?

Abstract

The brief's key findings are: (1) For married households, the amount of pre-retirement income replaced by Social Security depends on the labor force activity of both spouses. (1a) At the high end, couples with a non-working spouse get the replacement rate from the worker's benefit and from a spousal benefit. (1b) At the low end, couples with two working spouses and identical earnings get the same replacement rate as an individual worker. (1c) In the middle, couples see their replacement rate fall as the lower earner's wages rise. (2) As women go to work, replacement rates decline. (2a) They have dropped from 47 percent for those born early in the Depression to 42 percent for Early Boomers. (2b) By the time that Generation Xers retire, replacement rates are projected to fall by an additional 5 percentage points. (3) In addition to women working, Social Security's rising Full Retirement Age has also contributed to falling replacement rates.