Articles of interest

WISER Special Report

Widowhood: Why Women Need To Talk About This Issue

Widows is a word we tend to think of to describe our grandmothers. While widowhood is one of life’s tragedies that most families hope to avoid, what many of us choose to ignore is that for most married women, it is inevitable.

It’s a life situation that can affect even those who appear to be safe. Last year it happened to Katie Couric, America’s favorite morning co-anchor, of NBC’s “Today” show. When Katie became a widow at the age of 41 – she also became part of those dreaded statistics: a third of women who become widowed are younger than age 60; and half of all women who will become widowed become so by age 65.

Fortunately for Katie Couric, her heartbreak does not include the harsh financial challenges that generally follow for the average American widow. Barring large sums in life insurance or other assets, the economics of widowhood usually includes a sharp drop in income. For many women, the road to poverty begins after their husbands die. As women age they become more vulnerable to poverty – nearly a third of single women over age 75 are living in poverty – having less than $700 a month to live on.

Younger Widows

For someone Katie’s age with two young children under age 18, the Social Security system kicks in as an important safety net by providing a form of “life insurance” for survivors. When someone dies who has worked and paid into the Social Security system, part of the taxes go towards survivors insurance. Survivor’s benefits can be paid to certain family members that include widows, children and dependent parents. Although most working people view the Social Security system as a far distant retirement program, in fact, it pays more benefits to children than any other federal program.

Special Rule

After the earner’s death, family members are determined eligible if they meet certain factors – nobody will need more than 40 credits or 10 years of work. But the number of work credits you need depends on your age when you die – the younger a person is, the fewer work credits are needed to be eligible for a survivor benefit.

The amount of the benefit is based on the earnings of the person who died. For example, a monthly family survivor’s benefit for a spouse and two children would be paid to the spouse until the children reach age 16 and to the children until they reach the age 18. At that time the widow’s benefits stop, but they will begin again when the survivor. When the survivor reaches age 60, the eligible age for a reduced survivor benefit. If she can afford to wait until age 65, then she will receive a full benefit. If she is disabled, she is eligible at age 50.

Older Widows

Older widows are usually in a more precarious financial situation unless they have substantial savings, pensions or life insurance. Here’s what often happens to the other two-thirds – those women who are widowed after age 60.

At retirement age, both the husband and the wife begin to collect their Social Security benefits. Although the law is gender neutral, typically it’s the husband who collects a benefit as a retired worker while the wife has two choices. She can start collecting on her own record and then later collect based on her husband's work record.

Women Are More Likely To Collect Benefits Under Their Husband’s Work!

A woman is most likely to collect as the wife of a retired worker because she will collect more money. One major reason is pay, women earn only 73 cents for every dollar that men earn. Women are the caregivers in society, which means they are twice as likely to work part-time and are absent from the paid workforce for more than 15% of their careers. Women’s earnings are much less than a man’s over a lifetime and since all retirement benefits are based on a lifetime of earnings, half of her husband’s benefit is almost always larger than her own worker benefit.

Living Longer Means You Will Need More Income

Women live longer than men – usually about five years, so they need more retirement income for those extra years. Here’s the typical situation many widows find themselves facing. A married couple receives two Social Security benefits, but the husband’s death triggers the loss of one of those benefits. The loss of one of those benefits causes a decline in income by anywhere from one-half to one-third. Yet official income projections assume that a one-person household needs 80 % to achieve the same standard of living that the couple had – this is the widow’s first step into the spiral of poverty.

The real problem for widows is that everyone claims that the elderly are doing so much better than the rest of America. But, unfortunately, nearly 25% of single older women live in poverty and in fact are poorer than in any other industrialized nation.

What Can Be Done

We need to make sure that all women know about their vulnerability to these risks and that policymakers/politicians who are making changes to programs understand how they directly affect women.

A product of the POWERCenter, a joint project of WISER and the National Center on Women & Aging, funded by the U.S. Administration on Aging.