The Impact of Same-sex Marriage on Social Security's Finances

Open Access
Author:
Stoltz, Eric Zachary
Area of Honors:
Actuarial Science
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
  • Ron Gebhardtsbauer, Thesis Supervisor
  • Ron Gebhardtsbauer, Honors Advisor
  • Lisa Lipowski Posey, Faculty Reader
Keywords:
  • Social Security
  • same-sex marriage
  • LGBT
  • actuarial science
  • finance
Abstract:
This research seeks to analyze the impact of the expansion of the legalization of same-sex marriage on the finances of Social Security. Using Census Bureau data, models were developed to first calculate projected Social Security benefits for individuals, and then project the percent change in the actuarial present value of Social Security payments to married couples by recognizing same-sex marriage. The addition of same-sex married couples into the pool of Social Security beneficiaries impacts the value of Social Security payments due to two provisions: the spousal benefit and the survivor benefit. Based on the assumptions and modeling techniques used in the completion of this thesis, the spousal benefit, which allows a married Social Security beneficiary to receive the maximum of his or her own benefit or half of his or her spouse’s benefit, accounted for a 2.5% increase in annual Social Security marital benefit payments. The survivor benefit, which allows a married Social Security beneficiary to receive the maximum of his or her own benefit or 100% of his or her deceased spouse’s benefit, accounted for a 2.9% increase in annual Social Security marital benefit payments. In total, this increase in marital benefit payments due to the recognition of same-sex marriage is projected to lead to a 0.4% increase in annual Social Security disbursements.