Industry News

On June 11, 2019, the Center for Retirement Research at Boston College (CRR) released its issue brief, Women, Marriage, and the National Retirement Risk Index. For this study, the CRR used the National Retirement Risk Index (NRRI) to evaluate the retirement security of women ages 50-59.

The NRRI measures the percent of U.S. working households who are at risk of being unable to maintain their pre-retirement standard of living throughout retirement. The NRRI compares projected household replacement rates (i.e., retirement income as a share of pre-retirement income) with the target replacement rates needed to maintain their standard of living, and then calculates the percentage of households at risk of falling short. As of 2016, the results indicate that more than half of U.S. households will face major retirement income challenges and need more retirement savings to ensure retirement security.

Key findings include:

• Since women are spending more of their lives single, it is useful to consider how their marital history affects their retirement preparedness.
• Although married women have greater household earnings and wealth, they are 46% more at risk of failing to maintain their standard of living in retirement as compared with about 39%, on average, for all single women.
• The counterintuitive outcome is due to two-earner couples who: 1) get less from Social Security relative to their earnings as a result of the decline of the spousal benefit; and 2) may save less in 401(k)s since often only one spouse has coverage.

The brief concludes, “These findings highlight the need for two-earner couples to save more, and the best way to address this issue would be to broaden access to retirement savings plans in the workplace.” Adding, “The findings also underscore the importance of Social Security for single women due to their lower earnings, suggesting the value of maintaining currently scheduled benefits.”

The brief is available here.