More Than Half of Retired Women Receive Social Security Benefits Based on Their Husband's Work History

Filed in archive Retirement on June 2, 2008

Interesting article today from Liz Weston about the benefits of marriage and the "myth of the marriage penslty."

One statistic really jumped out at me:

One marriage penalty that remains has to do with Social Security taxes and working spouses, particularly women.

The social security administration says 62% of the women over age 62 who receive benefits do so based on their husband's work records, rather than their own. A little more than half of these women didn't earn enough to qualify for payments based on their own work records. The rest opted to take half of their husbands' benefits because they were larger than the checks they could qualify for based on their own earnings.

Now, in one very real sense, these women are better off married because they benefit from their husbands' larger Social Security checks.

In another sense, they're severely penalized because all the Social Security taxes they contributed over the years essentially yield no additional benefit. They'd get the same payments if they'd never worked and paid into Social Security.

This is no small potatoes. Social Security taxes now eat up 6.2% of every worker's paycheck, up to an annual maximum of $6,324 on earnings of $102,000 in 2008, while employers contribute an equal amount.

As more women work and earn better salaries, the proportion claiming benefits based on a spouse's record may decline somewhat. But because men still earn more on average than women, this phenomenon certainly won't disappear. Given the precarious state of Social Security and political realities, this is one marriage penalty that's likely to persist.

Isn't that interesting?

In one sense, there's no denying that these women would have received the same Social Security benefit whether they'd worked or not, so I guess you can call that a "penalty", in that they paid in and really didn't need to in order to receive benefits.

On the other hand, I think you'd have to have a beggar's mentality to say they didn't deserve to pay in, even if they eventually are getting retirement benefits based on their husband's work history. The fact is they still are receiving more in retirement than they ever paid in to Social Security, so they are being taken care of by the government for a larger amount than they contributed. (Which is true of all of us, of course, or at least those of us who've received Social Security thus far. Might be a different story for my generation.)

And, of course, if they had been single or worked enough while married, they would have received the benefit based on their own work history. It's not like the government is short-changing them.

It's an interesting statistic, but I don't see it as a marriage "penalty." If anything, it's as if being married gave them an extra gift, because they have the option to take whatever benefit is greatest, while someone who remained single would have no such option.

This is part of the reason I don't expect to see much money in Social Security. There's just no way to keep a system going in which you pay people significantly more than they originally paid in.