Social Security Changes Could Ease Financial Burden on Widows

To relieve some of the financial burden on widows, Social Security policy experts should looking to modernize the program by increasing the benefit dedicated to these surviving spouses, according to a new brief from the Center for Retirement Research at Boston College.

The Social Security widows benefit has been in place since 1939, created during a time when most households were single-earner, with a breadwinning husband and homemaking wife. But as more women have entered the workforce, many wives now receive their own Social Security benefits. Unfortunately, a wife’s earning does not increase her widow benefit, the brief notes.

So a widow from a $100,000 single-earner household would receive more in widow benefits than a widow from a $100,000 dual-earning household under the current calculations. The average widow payment as of December 2017 was $1,343.59 monthly, a Center for Retirement Research spokesperson told RMD.

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In addition, widows continue to represent a poor segment of the elderly population.

“The poverty rate for widows ages 65 and older is three times that of married women (of the same age); and at older ages, widows account for the majority of households,” the brief states.

One popular proposal to protect these women is moving funds from the couple’s spousal benefit to the widow’s — a solution that is “essentially shifting money from a time when both members of the couple are alive to a time when only one member is alive,” the brief states.

“Offsetting the cost of a higher widow benefit, by reducing the spousal benefit could, on balance, improve equity between one-earner and two-earner couples and lead to more dually entitled wives qualifying for a retirement benefit based on their own work record,” concluded the brief’s authors, Center for Retirement Research director Alicia H. Munnell and Peter F. Drukell, a professor of management sciences at Boston College’s Carroll School of Management.

This possible offset could differ across income brackets as well, with the most financially vulnerable getting their boost in benefits “by changes elsewhere in the program.”

Although many retirees have decreased confidence in this program, Social Security continues to be a source of income for many during retirement. Almost nine out of ten people 65 and over receive Social Security benefits, and it represents about 33% of income for the elderly, according to the Social Security Administration.

Written by Maggie Callahan

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