NCPA - National Center for Policy Analysis


June 7, 2005

The fight over the future of Social Security has a new rallying cry: Help the widows. Widows have come to symbolize a larger group of seniors who are having trouble making ends meet.

Outside experts cite several anomalies in the current benefit structure. Eugene Steuerle, one of the nation's leading authorities in this area and a senior fellow at the Urban Institute, has given them nicknames.

The anti-welfare-reform effect:

  • Single heads of households, usually women, often receive less in benefits than non-working spouses get.
  • For example, a single mother who earns about $20,000 a year for 40 years will get lifetime benefits of about $95,000.
  • A non-working spouse married to someone who makes $100,000 a year will get about $250,000.

The anti-working-woman effect:

  • Two-earner households often receive less than those with a single worker.
  • For example, a husband and wife who each earn $15,000 a year will get lifetime benefits of about $177,000.
  • But a couple with one spouse earning $30,000 will get about $273,000 because of the spousal benefit.

The divorce-roulette-wheel effect.

  • Spousal and survivor benefits apply only to those who stay married at least 10 years.
  • A person who has several marriages lasting at least 10 years could spawn additional spousal benefits each time.
  • Those who remarry and rely on spousal benefits for their retirement can come out behind if their new spouses have lower lifetime earnings than their former spouses.

The rules under which most Social Security beneficiaries live were designed in the 1930s, when the typical family included a husband who worked outside the home and a stay-at-home wife. At the time, actuarial science was not the primary determinant. Rather, says Steuerle, it was done by a ?bunch of guys sitting around a table.?

Source: Richard Wolf, "Who gets what: Simple, yet so complicated: Inequities obvious in benefit system, but a fix is elusive," USA Today, June 7, 2005.


Browse more articles on Tax and Spending Issues