Broker Check

Social Security: Income Replacement Trends Declining for Working Couples

January 25, 2017

Recent research has found that when it comes to collecting Social Security benefits, the income replacement rate for two-income couples has been declining steadily for a number of years.

In a way it seems counter-intuitive. Yet a recent report published by the Center for Retirement Research at Boston College found that as more women have left their posts as full-time homemakers and joined the workforce, the income replacement rate that Social Security provides to two-earner married couples has been in steady decline.

Demographic Shifts

The study found that as more women went to work, the "family benefits" component of Social Security - i.e., spousal and survivor benefits - began to decline sharply as a source of household retirement income. For instance, more than half of all women born in the early years of the Depression who became eligible for Social Security benefits in the 1990s were entitled to a spousal and/or survivor benefit in their initial claim. By contrast, fewer than a third of the oldest baby boomer women were entitled to family benefits when they first became eligible for Social Security benefits between 2010 and 2015. 1

This decline in family benefits has been the main catalyst behind the erosion in household Social Security replacement rates, which have dropped from about 50% for older couples born in the early 1930s, to 45% for the oldest baby boomer couples. Another steep decline in replacement rates (to just 39% of pre-retirement income) is forecast for Generation Xers when they begin to retire after 2028. 1

The study summed up the factors driving the trend quite simply:

"The labor force activity of women has a significant effect on the couple' replacement rate, which is the household' total Social Security benefit as a percentage of pre-retirement earnings. As women work, they increase the couple' pre-retirement earnings more than their Social Security benefits, so the household' replacement rate declines." 1

Estimate Your Benefits Annually

The declining income replacement rate is a critical issue to keep in mind as couples plan for their retirement years. Make a point of checking out your estimated benefits at least annually so you know how much to expect - and how much you'll need to provide from your own savings. You can estimate your retirement benefits online at, using one of the following methods:

  • The Retirement Estimator gives estimates of your retirement monthly benefit, based on your actual Social Security earnings record. The calculator shows early (age 62), full (ages 65-67 depending upon your year of birth), and delayed (age 70). The Retirement Estimator also lets you create additional custom estimates by inputting different stop-work ages and future earnings.
  • If you do not have an earnings record with Social Security or cannot access it, there are also other benefit calculators that do not tie into your earnings record. The calculators will show your retirement benefits as well as disability and survivor benefit amounts if you should become disabled or die.

Social Security should be a part of your retirement income planning. Also, remember that Social Security benefits don’t automatically increase every year. They typically are raised to reflect an increase in the cost of living.

1 Center for Retirement Research at Boston College, "How Work and Marriage Trends Affect Social Security' Family Benefits," June 2016.

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