Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52 Page 53 Page 54 Page 55 Page 56 Page 57 Page 58 Page 59 Page 60 Page 61 Page 62 Page 63 Page 64 Page 65 Page 66 Page 67 Page 68 Page 69 Page 70 Page 71 Page 72 Page 73 Page 74 Page 75 Page 76 Page 77 Page 78 Page 79 Page 80 Page 81 Page 82 Page 83 Page 84 Page 85 Page 86 Page 87 Page 88 Page 89 Page 90 Page 91 Page 92 Page 93 Page 94 Page 95 Page 96 Page 97 Page 98 Page 99 Page 100 Page 101 Page 102 Page 103 Page 104 Page 105 Page 106 Page 107 Page 108Single women in general fare much worse than their married counterparts in terms of retirement finances. 55 CHAPTER 3 | ECONOMIC PREPAR ATION FOR RETIREMENT Others also consider the impact of changing work patterns of men and women on Social Security replacement rates. Wu et al. (2013) calculate the replacement rate as the Social Security benefit amount divided by the AIME, so changes that result in higher earnings will tend to lower the replacement rate. The replacement rate goes from 47% for the HRS cohort to 39% for Early Baby Boomers. One-third of this decline is accounted for by the increase in female labor force participation and the resulting increase in earnings between the cohorts. The decline is larger for women than for men, and especially for women who are currently married, divorced or widowed, compared to women who never mar- ried. Increasingly, married women are earning Social Security benefits through their own labor force participation, which tends to reduce their eligibility for spousal benefits. One of the most important ways that house- holds can maximize their Social Security benefit is to delay claiming benefits until their full retirement age rather than filing for benefits early at age 62. Even when income is the same between those who claim at 62 and those who claim at 65, average household income for those who delay claiming is higher at age 72 than for those who claim early (Glickman and Hermes 2015). Gender Differences in Retirement Preparation Women face very different economic circumstanc- es in retirement than men. Single women and African American women appear to be especially vulnerable. Widowhood is one important risk but does not account for all of the discrepancy. Other factors may be at play, like household bargaining power and gender differences in financial savvy and risk-taking. Women live much longer than men on average and tend to marry men who are older than them. As a result, most women live the last years of their lives as widows, many for as long as 15 to 20 years. Depending on how well the couple prepares, widowhood can put some women at risk of financial strain or even poverty. Sevak et al. (2004) show that of women who were not living in poverty when they were married in 1992, 10.8% were living in poverty by 1998. Women who were poor before their husbands died face an even greater challenge because their husbands die at younger ages than more affluent men. This leaves poorer women widowed at younger ages and for a longer time. Thus part of the association observed between widowhood and poverty is explained by persistent poverty. Single women in general fare much worse than their married counterparts in terms of retirement finances. Yet important differences exist even among single women. Lee and Rowley (2009) compare financial portfolios of widowed, divorced, and never married women between the ages of 51 and 64 in 2004. Across all asset types, widowed women hold higher asset values than divorced and never married women. Divorced women have especially low levels of stock holding. Total net worth is highest for widowed women compared to divorced women and is lowest for never married women. Other studies confirm the risk associated with divorce for wom- en. Ulker (2009) shows that, while divorce has negative consequences for wealth accumulation for both men and women, declines for women are more severe. FIGURE 3-2  Fraction of total benefits re- distributed among deciles: 1992 and 2004 Source: Gustman et al. (2013). 0% 2% 4% 6% 8% 10% 12% Individuals Households 1992 2004