From the U.S. Government Accountability Office, www.gao.gov

Transcript for: The Impact of Trends in Marriage and Work Patterns on
Retirement Security 

Description: Audio interview by GAO staff with Charlie Jeszeck,
Director, Education, Workforce, and Income Security

Related GAO Work: GAO-14-33: Retirement Security: Trends in Marriage and
Work Patterns May Increase Economic Vulnerability for Some Retirees
 
Released: February 2014

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[ Narrator: ] Welcome to GAO's Watchdog Report, your source for news and
information from the U.S. Government Accountability Office. It's
February 2014. Retirement and survivor benefits from Social Security and
some employer-sponsored pensions have historically helped protect
couples and surviving spouses in old age. A team led by Charlie Jeszeck,
a director in GAO's Education, Workforce, and Income Security team,
recently examined how trends in marriage and work patterns may affect
retirement security. GAO's Sarah Kaczmarek sat down with Charlie to talk
about what they found.

[ Sarah Kaczmarek: ] Historically, what role has marriage played in
couples' retirement savings?

[Charlie Jeszeck: ] Well, marriage has actually contributed to
retirement security for people historically primarily by sharing costs
between people and pooling resources, getting some efficiencies there
and allowing for other investments. Also, under Social Security and
traditional pensions there are spousal and widowers benefits that are
available to spouses who are married. In addition, under traditional
pension plans spouses are required to offer joint survivor annuity to
their partner. So for all these reasons it has a positive effect on
retirement security. And if you look at poverty rates for people over
age 65, for those who are unmarried, poverty rates are 19.4 percent,
which is well above the national average, while for married people over
age 65, the poverty rate is 4.6 percent.

[ Sarah Kaczmarek: ] That's a really big difference. Your team also
looked at trends in marriage and labor participation in American
households over a 50-year period. What did you find there?

[Charlie Jeszeck: ] Well, there are two very broad trends. The first is
that for a variety of reasons people are waiting longer and also
choosing not to be married. Marriage rates have gone down. If you look
at the population over age 15 in 1960, 68 percent of that population was
married. This had fallen to 54 percent by 2010. If you look at the
percentage of the population in contrast that were unmarried, this rose
from 22 percent to 31 percent. So really significant changes there.
Meanwhile we've seen women, in particular, heading to the workforce. A
trend that really started in the post-WWII era, and it has pretty much
continued throughout the last 50 years. If you look at the labor force
participation for married women in 1960, it was 32 percent. This hit 63
percent, pretty much doubling by 2010.

[ Sarah Kaczmarek: ] And how have these changes impacted retirement
savings behavior?

[Charlie Jeszeck: ] Well, in two ways. We've seen a shift in the type of
social security benefits that people are receiving. There are fewer
people receiving spousal benefits or survivor benefits. And an increased
number of partners receiving benefits on their own wage record. So there
has been a big shift there. Further, particularly for women as they've
entered the labor force and become workers, they are saving more on
their own for retirement. And if you look for the household unit, women
now contribute 38 percent of family retirement savings. And that's up
from 20 percent in 1992.

[ Sarah Kaczmarek: ] Let me ask you then, what does this tell us about
the future of retirement security for folks?

[Charlie Jeszeck: ] I think basically what it means is with later
marriages or no marriage, women in particular will have to save more for
retirement on their own. This is a trend that's been true for me for a
while with the shift from defined benefit to defined contribution plans.
Workers have to contribute more to their plans and make those financial
decisions particularly earlier in life.

[ Sarah Kaczmarek: ] Finally, for all of us now thinking about our
retirement savings, what's the bottom line here?

[Charlie Jeszeck: ] The bottom line is that everybody needs to save for
retirement, especially women who tend to work less and may have a more
intermittent workforce pattern throughout their career. Marriage,
through the pooling of resources, can facilitate retirement security.
But one last point, if you do get married you should try to stay
married. If you look at the impact of divorce particularly on women,
assets in the event of a divorce, decline for 41percent for women. And
their incomes decline also by 41percent. So divorce could have a very
adverse effect on people's income and also their retirement security.

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