The Retirement Income Gap Between Married Men And Single Women Is Getting Smaller

The younger generation of female boomers is more successful than their elders, but there’s a caveat.

A recent study finds that single women are closing the retirement gap with their married counterparts. Still, it’s not easy to rejoice about progress toward equality when it appears to be driven mainly by the declining fortunes of males.

Studies have been conducted on how well-prepared US employees are for retirement, and when specific attention is paid to women, the results are much more sobering. The fact that women have lower wages, stay out of labor for longer, and outlive males is a major factor in this.

Because married couples tend to be wealthier when they combine their resources, the retirement prospects for women who are single or divorced have traditionally been bleak. Boston College’s Center for Retirement Research economists found that middle-class baby boomer women no longer suffer a financial penalty for remaining unmarried.

The younger generation of boomers, who have spent much of their adult lives as single adults, are catching up to their married peers.  

For Newly Retired Females, Marriage Has a Minimal Impact on Finances

Who or what is behind this? There are two parts to it. Firstly, more younger baby boomer women than older women went to college and entered the labor field. As a result, they’re bringing in a higher income. This is good news.

The good news is that they are improving; the bad news is that a large portion of the reason they are catching up isn’t improved performance. The problem is particularly severe for married guys. They concluded in a blog post that the considerable fall in median wealth for women who spend their lives predominantly married primarily reflects diminishing fortunes for their husbands.

Remember that the salary difference between the sexes has been narrowing because women’s incomes have increased and men’s wages have been relatively constant. The income replacement rate is the primary indicator of whether or not one can maintain their pre-retirement standard of living in retirement. This analysis considers how much of a woman’s pre-retirement income would be replaced by an annuity after retirement (from financial assets or future Social Security or pension plan benefits). Women of the Silent Generation, who came before the baby boomers and spent most of their adult life in marriage, had a higher income replacement rate between the ages of 59 and 60 (44%) than did those of the baby boom generation (36%) who had spent most of their adult lives as singles. Aged 59–60, the income replacement rate drops to 35% for younger married boomers (those born between 1960 and 1965), compared to 33% for their single contemporaries.

This is attributed partly to the fact that baby boomer women had a better-earning potential than boomer men. Still, it is also because many boomer males lost their jobs during the Great Recession, and many of them lost them during their peak earning years.

Remember that these findings are based on multi-year research that periodically surveys persons above 50. The most up-to-date interviews utilized for the research by the Center for Retirement Research were conducted in 2018. Thus they do not account for the significant increases in the stock market between late 2018 and early 2024. Since married people are more likely to possess investments in the stock market, this rise may have benefited them.

However, the study’s primary participants were middle-income earners, who are more likely to rely on Social Security in retirement than on investments.

Married women may find these calculations more difficult because of the impact of Social Security benefits. Those who have never worked may have a greater rate of income replacement. That’s because even if they didn’t work before retirement, they could still collect their own Social Security payment at the end of their lives (up to half of their spouse’s amount). Because their pre-retirement income is larger than what they may be entitled to from Social Security, the income-replacement rates for married working women have decreased.