Retirement Income

Pursuant to a legislative requirement, GAO analyzed the potential effects of the spousal consent provision of the Retirement Equity Act of 1984 on the economic status of future widows, focusing on: (1) how many wives could gain entitlement to survivor benefits as a result of the act; (2) what economic circumstances influenced whether husbands selected survivor benefits, prior to the act; (3) to what extent survivor benefits would increase widows' incomes; (4) whether increased access to survivor benefits would help those most vulnerable to poverty; and (5) to what extent increased access to survivor benefits would lessen widows' dependence on social security.

GAO found that: (1) if the act's spousal consent requirement had been applicable from 1980 through 1981, the proportion of wives potentially entitled to survivor benefits would have increased from 26 to 43 percent; (2) the larger the survivor benefit and the greater its importance as a potential source of income, the more likely husbands were to have elected it; (3) if all of the men who did not elect survivor benefits had done so, the median survivor benefit would have been about $142 per month for all wives and $68 per month for those in the lowest third of the income distribution; (4) survivor benefits would have little effect on the poverty rate among widows, since those widows most likely to become poor had husbands who lacked pensions; and (5) most low- and middle-income wives would continue to depend on social security benefits as their major source of income in widowhood.