@article {11783, title = {How Much Does Social Security Offset the Motherhood Penalty?}, number = {IB$\#$21-11}, year = {2021}, institution = {Center for Retirement Research at Boston College}, address = {Chestnut Hill, MA}, abstract = {When women become mothers, their labor market income often takes a substantial hit. This {\textquotedblleft}motherhood earnings penalty{\textquotedblright} becomes even larger with each additional child and permanently reduces earnings throughout mothers{\textquoteright} worklives. Previous studies have linked the penalty to mothers{\textquoteright} reduced educational attainment, more time out of the workforce, higher job search costs, and poor job matches. What remains unanswered is the extent to which the penalty impacts women{\textquoteright}s retirement income. This brief, based on a recent study, answers part of this question by looking at how Social Security provisions address the motherhood penalty. The discussion proceeds as follows. The first section explains how Social Security can impact the motherhood earnings penalty and reduce retirement income shortfalls for mothers. The second section lays out the data and methodology for this analysis. The third section finds that Social Security offsets a substantial portion of the earnings penalty. The final section concludes that {\textendash} despite the equalizing role played by Social Security {\textendash} a motherhood earnings penalty will remain without policy intervention, such as earnings credits for caregivers.}, keywords = {Motherhood, Social Security}, url = {https://crr.bc.edu/briefs/how-much-does-social-security-offset-the-motherhood-penalty/}, author = {Matthew S. Rutledge and Alice Zulkarnain and Sara Ellen King} } @article {9611, title = {How Much Does Motherhood Cost Women in Social Security Benefits?}, number = {WP$\#$2017-14}, year = {2017}, month = {10/2017}, pages = {2-22}, institution = {Center for Retirement Research at Boston College}, address = {Boston, MA}, abstract = {The increase in female labor force participation coupled with a higher number of women reaching retirement unmarried has increased the share of women claiming Social Security benefits earned through their own job histories. But they still bear the lion{\textquoteright}s share of caregiving responsibilities, and the previous literature has provided clear evidence that motherhood reduces earnings during the childbearing and child-rearing years. What remains understudied is the extent to which mothers face lower lifetime earnings and, consequently, lower Social Security income. This paper uses the Health and Retirement Study (HRS) linked to administrative earnings records to answer three questions. First, how much less do mothers earn over their careers compared to childless women, and how much less do they earn for each additional child? Second, how do Social Security benefits differ between mothers and non-mothers? Third, how does each of the existing elements of the Social Security system that indirectly help mothers {\textendash} namely, spousal benefits and the progressivity of the benefit formula {\textendash} contribute to reducing the motherhood penalty? }, keywords = {Labor force participation, Motherhood, Social Security, Women and Minorities}, url = {http://crr.bc.edu/wp-content/uploads/2017/10/wp_2017-14.pdf}, author = {Matthew S. Rutledge and Alice Zulkarnain and Sara Ellen King} } @article {9610, title = {How much does Out-of-Pocket Medical Spending Eat Away at Retirement Income?}, year = {2017}, month = {10/2017}, pages = {2-31}, institution = {Center for Retirement Research at Boston College}, address = {Boston, MA}, abstract = {The adequacy of retirement income {\textendash} from Social Security benefits and other sources {\textendash} is substantially reduced by Medicare{\textquoteright}s high out-of-pocket (OOP) costs. This project uses the 2002-2014 Health and Retirement Study to calculate post-OOP benefit ratios, defined as the share of either Social Security benefits or total income available for non-medical spending. The project decomposes the share of income that is going toward premium payments and services delivered and examines how these post-OOP benefit ratios differ by age, gender, income, supplemental insurance coverage, and health status. The project also updates previous studies{\textquoteright} estimates to document how OOP spending and the post-OOP income ratios changed following the introduction of Medicare Part D prescription drug coverage in 2006 and the closing of the {\textquotedblleft}donut hole{\textquotedblright} coverage gap in 2010, which decreased OOP costs under Part D for those spending moderate amounts on prescriptions.}, keywords = {Gender Differences, Income, Medicare, Social Security}, url = {http://crr.bc.edu/working-papers/how-much-does-out-of-pocket-medical-spending-eat-away-at-retirement-income/}, author = {Melissa McInerney and Matthew S. Rutledge and Sara Ellen King} } @article {9140, title = {Social Security and Total Replacement Rates in Disability and Retirement}, number = {WP$\#$2017-6}, year = {2017}, month = {05/2017}, institution = {Center for Retirement Research at Boston College}, address = {Chestnut Hill, MA}, abstract = {Social Security provides higher replacement rates to disability insurance beneficiaries than retired beneficiaries. This fact reflects two factors: 1) Disability Insurance (SSDI) beneficiaries have lower career earnings, and Social Security benefits are progressive; and 2) SSDI benefits are not reduced for claiming early. This project uses the 1992-2010 waves of the Health and Retirement Study (HRS) linked to Social Security Administration earnings records to decompose the differences between the Social Security replacement rates for retired worker and SSDI beneficiaries into these two factors. The project also examines how the total replacement rate {\textendash} which accounts for other sources of income in addition to Social Security {\textendash} differs between retirees and SSDI beneficiaries to capture the difference in overall retirement security between the two groups. The results indicate that about half of the 10-percentage-point advantage in Social Security replacement rates for SSDI beneficiaries is due to the actuarial adjustment applied to retirement benefits, implying that career earnings are not that different between retired workers and SSDI beneficiaries. But total replacement rates are substantially lower for SSDI beneficiaries, which indicates that, despite Social Security{\textquoteright}s vital role in providing a reliable income source, SSDI beneficiaries have much lower post-career well-being than retired workers.}, keywords = {Consumption and Savings, Disabilities, Retirement Planning and Satisfaction, Social Security}, url = {http://crr.bc.edu/working-papers/social-security-and-total-replacement-rates-in-disability-and-retirement/}, author = {Khan, Mashfiqur R. and Matthew S. Rutledge and Geoffrey T. Sanzenbacher} } @article {8639, title = {The Impact of Temporary Assistance Programs on the Social Security Claiming Age}, number = {CRR WP 2015-27}, year = {2015}, pages = {1-331}, institution = {Center for Retirement Research at Boston College}, address = {Chestnut Hill, MA}, abstract = {Delaying claiming past the early eligibility age of 62 has taken on increased importance. Individuals turning 62 with no job and limited income may be able to use temporary assistance programs such as Unemployment Insurance (UI), Medicaid, and the Supplemental Nutrition Assistance Program (SNAP) as sources of support prior to collecting Social Security benefits. To what extent do these programs allow recipients to delay Social Security claiming? The challenge in answering this question stems from the fact that program users{\textquoteright} dire economic straits may make them more likely to claim benefits from both Social Security and these programs, generating a misleading correlation between Social Security claiming and temporary assistance benefits. This paper constructs instruments for program generosity that vary with an individual{\textquoteright}s state of residence but should not reflect the characteristics or circumstances of the individual.}, keywords = {Older Adults, Public Health, Public Policy, Social Security, Welfare}, url = {http://crr.bc.edu/wp-content/uploads/2015/10/wp_2015-27.pdf}, author = {Geoffrey T. Sanzenbacher and April Yanyuan Wu and Matthew S. Rutledge} } @article {5868, title = {Will the Average Retirement Age Continue to Increase?}, year = {2015}, institution = {Boston, MA, Center for Retirement Research at Boston College}, abstract = {Using Health and Retirement Study (HRS) data, this paper examines how changes in individual workers past and present pension coverage, retirement incentives in Social Security, and retiree health insurance have contributed to retirement decisions for the 1931-1953 birth cohorts. It then uses these findings to project retirement behavior for the 1955-1987 cohorts in the Survey of Income and Program Participation (SIPP). A key assumption is that younger cohorts will have no defined benefit (DB) pensions or retiree health coverage in their future jobs. A key limitation is the assumption of a stable relationship in each successive cohort between each factor and labor market decisions.}, keywords = {Employment and Labor Force, Pensions, Retirement Planning and Satisfaction, Social Security}, author = {Matthew S. Rutledge and Gillis, Christopher M. and Anthony Webb} } @article {5953, title = {How Important Is Medicare Eligibility in the Timing of Retirement?}, year = {2013}, institution = {Boston, Center for Retirement Research at Boston College}, abstract = {Eligibility for Medicare at age 65 is widely viewed as an important factor in retirement decisions. However, it has been difficult to quantify the influence of Medicare because eligibility for Medicare came at the same age as Social Security s Full Retirement Age (FRA). The recent rise in the FRA, along with other changes, has decoupled the age-related incentives in the two programs, making it easier to estimate the effect of Medicare eligibility on the timing of retirement. This brief, based on a recent study, provides such estimates of the importance of Medicare on retirement decisions.}, keywords = {Medicare/Medicaid/Health Insurance, Public Policy, Retirement Planning and Satisfaction, Social Security}, author = {Norma B Coe and Khan, Mashfiqur R. and Matthew S. Rutledge} } @article {10757, title = {Great Recession-Induced Early Claimers: Who Are They? How Much Do They Lose?}, number = {WP$\#$2012-2}, year = {2012}, institution = {Center for Retirement Research at Boston College}, address = {Boston, MA}, abstract = {During the Great Recession, more older workers have claimed Social Security benefits early. This paper addresses two important policy questions: Who are these early claimers? How much retirement income have they lost as a result of claiming early? Using the Health and Retirement Study (HRS) we estimate a discrete-time hazard model that makes claiming Social Security benefits a function of age, personal characteristics, and the national unemployment rate. We project that high unemployment rates during the Great Recession led to a 5-percentage-point increase in the probability of claiming early relative to a less severe recession such as the 2001-2003 downturn, and this increase was nearly uniform across socioeconomic groups. Our estimates also suggest that while the Great Recession did impact the claiming decision, it did not cause a dramatic change in benefits. {\textquotedblleft}Great Recession Claimers{\textquotedblright} {\textendash} those whom we simulate were likely to claim early during the Great Recession but would not have in a milder downturn {\textendash} filed for Social Security only 6 months earlier, on average, than they would have in a minor recession. This modest change in timing reduced their monthly Social Security benefit checks by $56, or 4.6 percent of average monthly benefits, and the Social Security replacement rate fell by 1.7 percentage points relative to a more typical recession. The benefit reduction resulted from the combined effect of the actuarial reduction for early claiming and the foregone opportunity to continue working and increase the wage base used for calculating benefits.}, keywords = {Recession, Social Security}, url = {https://crr.bc.edu/working-papers/great-recession-induced-early-claimers-who-are-they-how-much-do-they-lose/}, author = {Norma B Coe and Matthew S. Rutledge} }