Women and Social Security: How to Get the Biggest Check


As a single woman with no children, Karen Callahan brings together the financial pieces that will protect her on her own for a long life. A big piece of his puzzle: getting as much Social Security income as possible.

Ms Callahan, 67, of Marlborough, Mass., Waits to claim her benefits until she turns 70, when she will be entitled to $ 3,100 a month. If she applied today, she said, her benefit would definitely be reduced to around $ 2,500.

The income from a web design business she owns will cover her expenses up to age 70, including a monthly condominium fee of $ 375 for her townhouse. In excellent health and capable of doing the 120-pound bench press, Callahan expects to live long enough to achieve more lifetime benefits while expecting less for longer.

“Hell’s bells – I put the money in, and I’m going for the maximum,” she said.

For many older single women, as well as divorced and widowed women, getting the most out of social security is crucial, experts say. Women tend to live longer than men and are more dependent on social security as their main source of retirement income. In addition, their benefits, on average, are lower, in part because of lost income or part-time work during years of caring for older children and parents.

Even so, many women leave considerable amounts of this guaranteed source of inflation-adjusted money on the table, said Marcia Mantell, a retirement consultant in Plymouth, Massachusetts, and author of “What’s the Deal With Social” Security for Women? “

“This safety net is incredibly important in old age,” she said. “Yet most women don’t understand how to fully maximize this benefit. “

Young women with years of work ahead of them can begin to maximize their benefits, Ms. Mantell said, by looking for jobs with more money and asking for increases, which “will pay higher benefits tomorrow.” .

To start cutting through the quagmire, it helps to know the basics. A key concept is known as full retirement age – when a person is entitled to a full benefit based on their income. A person born between 1943 and 1954 can claim a full retirement pension at age 66. The full retirement age gradually increases to age 67 for people born in 1960 or later.

The earliest a person can claim is 62, but the benefit will be permanently reduced by a certain percentage for each month the beneficiary claims before reaching full retirement age. For example, a woman whose full retirement age is 67 will receive 70% of her full benefit by applying at 62.

For each year that a beneficiary defers their request between the full retirement age and 70 years, the benefit increases by 8%; this is called a deferred retirement credit.

For couples, including same-sex married couples, a low-income spouse can claim a “spouse” benefit on their partner’s employment record at 62, but only if the other partner has started receiving it. . At full retirement age, the lower income earner may receive a spousal benefit equal to 50% of the highest income full retirement benefit.

A potential beneficiary can consult their social security declaration online, which indicates their annual income statement and provides estimates, based on this statement, of the amount they will receive at full retirement age, or by applying at 62 or waiting until 70.

A single woman, whom she never married or whose marriage lasted a short time, should delay her claim for benefits as long as possible, according to experts.

Say at age 67, a woman is entitled to a monthly benefit of $ 2,000. If she claims at 62, she will receive $ 1,400. If she waits to age 70, her benefit will be $ 2,480, a 77% increase in her monthly income for life.

“For single women, longevity is their biggest risk,” Ms. Mantell said. “Even waiting another year after full retirement age will earn him 8% more benefits. “

Unless dying relatively early, a person is likely to reach the age where the total lifetime benefits of a delay exceed the total lifetime benefits of claiming smaller benefits earlier, according to research by William Reichenstein and William Meyer. They are the directors of Social Security Solutions, a company that uses pioneering software to help individuals and couples maximize their lifetime benefits.

This probability is particularly true for women. In 2019, the average life expectancy of 65-year-old American women was 85.8 years, according to the United States Administration on Aging.

“Unless a single woman has a shorter than average life expectancy, she can maximize her benefits by waiting to age 70,” said Dr Reichenstein, Emeritus Professor of Investments at Baylor University .

A single woman may also be able to increase her benefits by delaying retirement. The Social Security Administration calculates monthly benefits by looking at the 35 best-paid years of a beneficiary. Even part-time work can replace any “zero” for years of care.

Ms Callahan said she expected earnings from her longer work to replace the years of low income when she started her business as well as the years she was a teacher and not contributing to the social security system , instead receiving a pension. (Public employees in a dozen states are not covered by social security.)

Women who lost their jobs, possibly during the pandemic, and who applied for reduced benefits early have a chance to redo. One option is to “suspend” their benefits at full retirement age and resume them later, perhaps at age 70.

“The delayed retirement credits mainly compensate for the reduced early claim payments,” Ms. Mantell said.

Women tend to fare worse financially than men after divorce, but an ex-wife may be able to lessen the blow by claiming a spouse’s or survivor’s benefit on her ex-husband’s work record. .

“Many women who have spent years caring for their children divorce after decades of marriage,” said Michelle Petrowski, a certified financial planner in Scottsdale, Ariz., Who specializes in divorce matters. “They haven’t had the opportunity to earn an income or donate to a 401 (k), and they’re relying on that benefit.”

For a divorced woman to be entitled to a spouse’s benefit, both spouses must be at least 62 years old and the marriage must have lasted 10 years or more. Unlike a married woman, a divorced woman can claim even if her ex-husband has not yet filed for benefits.

A divorced woman who waits until full retirement age can apply for a spouse’s benefit which will be 50 percent of her ex-spouse’s full benefit. The allowance is reduced by a certain percentage for each month she receives before that date.

This higher benefit can represent a significant retirement fund for a woman whose marriage may have ended decades earlier.

Take the example of a woman whose total pension from the ex-husband is $ 2,400, said Dr. Reichenstein. His own full retirement benefit may be $ 800. If she applies for a spousal benefit at age 67, she will receive $ 1,200 per month, accumulating $ 259,200 at age 85. If she applies at age 62, her monthly benefit will be $ 830, down from $ 30,000 at age 85.

A woman who has two or more former spouses to whom she has been married for 10 years can choose the higher spousal benefit. And if one of the former spouses dies, she can upgrade to a larger survivor benefit. An ex-wife loses the spouse’s benefit once she remarries.

An ex-husband is not informed when his ex-wife requests a benefit on his file. His benefits will not be reduced, nor will his current wife’s spousal benefits.

According to the Social Security Administration, about 32% of all widows receiving Social Security “survivor” benefits in 2018 were between 60 and 70 years old.

Reinforcing the “benefits” for widows in this younger category is critical, said Laura Mattia, certified financial planner at Atlas Fiduciary Financial in Sarasota, Florida. “A widow can live another 30 years and will have to be financially responsible for herself,” she said.

A widow who claims the survivor benefit at full retirement age is eligible for 100 percent of the benefit that her late spouse was receiving or was eligible to receive. A widow can claim as early as age 60 (50 if disabled), but her benefit will be permanently reduced for each month she claims before full retirement age. A younger widow may be eligible if she is looking after the children of the deceased spouse.

A widow in her late 50s or early 60s who has little or no income is likely to receive the biggest payout in life while waiting to claim until age 66 or 67. complicated if it has its own workers allowance.

A widow who receives an earnings-based retirement pension has several options.

One option is to apply for your own smaller retirement benefit at age 62 and then switch to the larger survivor benefit at age 66 or 67. In this way, she creates an income stream at 62, while increasing the amount of her survivor benefit.

But a wife whose retirement pension at 70 is more than the survivor benefit should take the survivor benefit early, perhaps at age 60 or 62, and let her own benefit increase, bolstered by deferred retirement credits, experts advise.

“The most important rule for a widow is to compare her retirement pension at age 70 and her full survivor’s pension, which would start at the age of full retirement,” said Dr Reichenstein.

A husband has a big role to play in ensuring his wife’s financial security after her death, Dr Mattia said. She often advises husbands not to claim their own benefits until age 70 and thus increase the survivor benefit.

“He may think, ‘I’m not going to live that long,’ but she, in the meantime, can live a much longer life,” Dr Mattia said.

Whatever strategy a woman uses, financial planners say Social Security should only be part of a retirement income stream. When Ms Callahan turns 70, she said, she expects to pay half of her expenses, including travel, with three things: profits from selling her business, assets in her account. individual pension and possibly the money from part-time work.

Social Security will cover the other half. Waiting until age 70 to collect, she said, will give her a much better chance “to live the lifestyle I want to live.”


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