Social Security spouse and survivor benefits for the modern family

Social Security spouse and survivor benefits for the modern family

Social Security spouse and survivor benefits for the modern family

Favreault

Melissa M.

Favreault, Melissa M.

Author

Author

Steuerle

C. Eugene

Steuerle, C. Eugene

Author

Author

text

working paper

Chestnut Hill, Mass. Center for Retirement Research at Boston College20072007monographic

Chestnut Hill, Mass.

Chestnut Hill, Mass.

Center for Retirement Research at Boston College

2007

2007

monographic

Englisheng

English

eng

electronicapplication/pdfborn digital

electronic

application/pdf

born digital

Our project uses DYNASIM3, the Urban Institutes dynamic microsimulation model of the U.S. population, to simulate several alternative systems of Social Security auxiliary benefits. We specifically consider earnings sharing, a system in which a husbands and a wifes earnings records are combined and averaged over the duration of their marriage when computing Social Security benefits. We also consider whether other changes to Social Securitys benefit computations like caregiver credits, minimum benefits, and more modest changes to spouse/survivor benefits could improve program adequacy and horizontal equity with less complexity and fewer transition difficulties relative to earnings sharing. Each proposal we examine substitutes existing spouse (and, sometimes, all or parts of survivor) benefits with mechanisms that explicitly acknowledge marital partnerships, are more neutral with respect to marriage, and/or better target economically vulnerable people. All proposals are roughly cost-equivalent in 2050. We find that all three packages earnings sharing, replacement of most of the spouse benefit with a minimum, and full spouse replacement with caregiver credits reduced poverty modestly and made lifetime benefits more similar for couples paying the same amount in taxes relative to current law scheduled. The earnings-sharing proposal, however, only achieved the poverty reduction with significant adjustments to the treatment of surviving spouses through a self-financed survivor benefit. The packages reveal important tradeoffs among beneficiary groups, with particular tensions between workers and non-workers, and married, never married, divorced, and widowed persons.

Melissa M. Favreault and C. Eugene Steuerle.

CRR WP2007-7

CRR WP2007-7

CRR WP

2007-7

http://crr.bc.edu/images/stories/Working_Papers/wp_2007-7.pdf

MChBEnglisheng

MChB

Englisheng

English

eng