A recent analysis was released from the Center for Retirement Research at Boston College that shows Social Security benefits help reduce the gap in retirement benefits between mothers and women who have no children.
It is understandable that a mother who works is more than likely going to earn less income than a woman who has no children because a woman’s career may be put on hold when she has children, so it is not surprising to learn that, according to the Center for Retirement Research at Boston College, a mother earns just 37 percent of what childless women earn. Fortunately this income gap is reduced when you look at Social Security benefits as mothers earn about 60 percent of what childless women earn in retirement income. Below is the conclusion of the report issued.
Even as women have ramped up their involvement in the labor force, the earnings penalty for mothers remains substantial. Social Security is able to offset a significant amount of the penalty by the time mothers reach retirement through two separate channels: the progressive design of worker benefits and the availability of spousal benefits. While Social Security will continue to play a role in reducing disparities between childless women and mothers in retirement, a motherhood penalty will remain. And factors such as different levels of 401(k) saving are likely to aggravate the disparities. In recent years, though, policymakers seem to be more attuned to the motherhood penalty. In part to address mothers’ short-term loss of earnings, the American Rescue Plan Act temporarily expanded the child tax credit. To address mothers’ retirement income gap, legislators have also proposed the Social Security Caregiver Credit Act, which would give caregivers credit for lost earnings when calculating retirement benefits; this proposal was also part of the Social Security reform plan outlined during President Biden’s campaign.
