Low-Income Mothers Are Financially Vulnerable After Retirement. Social Security Credits Could Help.

by Ivana Greco

American women face significant challenges once they hit retirement age. On average, women earn less over the arc of their working lives, have less in retirement savings, and receive fewer Social Security benefits than men. The Institute for Women’s Policy Research has found that “women are more likely than men to rely on Social Security as their primary or sole source of retirement income.” However, the same research found a nearly 25% gap between Social Security benefits paid out to men vs. women. In other words, while American women rely on Social Security benefits more than men, they receive significantly fewer benefits. This helps to explain why so many American women live in poverty after retirement. The Congressional Research Service found that women over 80 years old are more likely to live in poverty than any other demographic among the elderly.

Many factors contribute to the gap between men’s retirement benefits vs. women’s retirement benefits. A big one? Women are more likely to take time out of the workforce to care for others. Mothers, in particular, often struggle to adequately prepare for retirement. The Brookings Institute has noted that “having a first child reduces a woman’s Social Security benefits (through reduced earnings) by an average of 16 percent.” Because many mothers take a step back from the workforce after their children are born, they face a double negative impact: first, their initial paycheck decreases, and then their eventual Social Security payout is less as well. Social Security payments are based on a worker’s top 35 earning years. Mothers who earn less because they are caring for children will also receive fewer Social Security benefits after they retire.

Mothers who earn less because they are caring for children will also receive fewer Social Security benefits after they retire.

What can be done to protect low-income mothers who are struggling to prepare for retirement? A Social Security caregiver credit system could help. In general, “caregiver credits” provide a bump for those who leave the workforce to care for others. Consider a low-income mother who spends three years at home taking care of her little children but then returns to the workforce once they are ready to start preschool. If she works for 32 years, under our current system, she will receive “0” for three years of entries when Social Security is calculated. Remember: 35 years are considered, but she didn’t work for three of those years, resulting in zero income for that portion of the calculation. However, a system of caregiver credits could help blunt the financial impact of the time she took out of the workforce — by giving her some type of imputed credit in the Social Security calculations for the years she spent caring for her children.

Many other countries have caregiver credits for mothers who step out of the workforce for a time. The design and specific impact of these credits vary by country, but there are numerous possible options. One kind of credit, available in France, specifically targets low-income parents — usually moms — who leave the workforce for a short period of time to care for kids. These parents receive a credit as if they were working at minimum wage when it comes time to calculate their benefit from the French pension system. In Germany, these credits are structured to incentivize parents (again, particularly moms) to return to work after birth. The U.S. Social Security Administration released a report on these EU caregiver credits that explained: “caregiver credits are used for a number of secondary objectives, including promoting higher fertility rates, creating an incentive to return to work following childbirth, and simply rewarding the act of providing unpaid care.”

Any proposed system of caregiver credits in the United States will have to reckon with the fact that the Social Security Trust Fund is currently under significant pressure. Indeed, the present hurdle for policymakers is largely to determine cost-saving measures related to Social Security. Expansion of Social Security benefits for caregivers will face significant political and practical obstacles. Nevertheless, it is a policy worth seriously considering, with potential appeal across the aisle.

First, in an era in which family policy issues take up significant space in the national policy discussion, support for mothers — especially poor mothers — is an attractive political option. In the last presidential election, both candidates devoted significant airtime towards proposals to support parents. Then Vice President Kamala Harris discussed paid leave issues and child care costs, while J.D. Vance extensively discussed the child tax credit. A July 2025 Engage poll found that 9 in 10 voters — Republicans, Democrats, and Independents — believe Congress should work together on child care, with 65% of Trump voters calling it a top Administration priority.

Second, there are a number of recent media reports that show mothers are increasingly leaving the workforce in 2025. The reasoning behind young mothers deciding to stay home is complex, but appears to partly be driven by child care costs and loss of remote work options. Interestingly, as the experience in Europe has shown, a Social Security caregiver credit system can be structured to incentivize mothers to return to work after the initial period of caring for young children is over. As discussed above, Germany provides credits for a period after a parent returns to work, in order to both support parents who leave the workforce for a time to take care of a young child and incentivize those parents to eventually return to the workforce.

A persuasive case can be made in the United States for a limited caregiver credit for low-income young mothers. Like the system in France, it might be targeted to replace two or three years at minimum wage in our eventual Social Security calculations, so that working-class moms who drop out of the workforce to care for little kids aren’t facing a difficult financial situation when it comes to retirement age. This boost would be most important for single moms (who wouldn’t have access to the spousal credit available under our system) or moms who got divorced before being married for a decade (the spousal credit is available to divorced Americans, but only after ten years of marriage). For politicians interested in supporting families, fertility rates, and even pro-life issues: a targeted Social Security credit might help provide a mechanism for making the lives of moms a little easier and setting them up for a more secure retirement.