What Women Need To Know: Social Security
Let’s talk social security.
We spend a lot of time talking about retirement planning on this blog – in fact, the topic is pretty much the cornerstone of the Rich Women Rock narrative. I believe that setting yourself up to live a life full of choices is one of the best gifts that you can give yourself.
And, how you plan to handle your social security benefits is a really big choice when it comes to your retirement planning. After all, across the developed world, women tend to live longer than men on average. Your Social Security benefits will be a key part in your retirement strategy.
So. What are the to-often-unknown facts? Here are three rules of thumb that I want every woman to know.
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DELAY, DELAY, DELAY
This may be the one and only time that you will hear me use the word delay in the same sentence as retirement planning – but there you have it! What I mean by saying DELAY is this…
You can qualify for Social Security benefits as early as the age of 62. This age is considered “early retirement” by the Social Security Administration. Typical retirement is listed between the ages of 66 and 67, depending on when you were born. BUT, if you put off collecting Social Security until the age of 70 – you can collect up to 8% more in benefit money for every year past your full retirement age that you delay collection.
So, that means, that you a woman whose full retirement age is 66 would receive a benefit reduced as much as 30% if she applied for early retirement benefits at 62 – but could receive an increased benefit of nearly 30% if she waits until the age of 70 to begin receiving benefit checks from the Social Security Administration. Here is a retirement age calculator from the social security website that will help you do the math and review your own case.
In short, collecting Social Security benefits is one of the few things that may be worth putting off if your situation allows.
What to know what your Social Security payment is currently expected to be? Visit www.socialsecurity.gov/mystatement and start looking at the numbers.
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Spouses Need To Strategize
Social Security was developed in the 1930s, largely before women entered the professional workforce. As such, the program is still very much based on the assumption that women will not remain in the workforce for as long as their spouses will. That means that your spouse’s Social Security check is designed to support you, too.
Right or wrong, the system may benefit women who work professionally for a short time, and then leaves the workforce to raise a family or pursue other interests. This is especially the case when that woman qualifies for Social Security benefits independently from her husband. When this is the case, she can suspend her own benefits, use her ½ of her husband’s higher-earning benefits to augment their retirement, and then begin using her own benefits after the age of 70 if her value has increased.
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Divorced Spouses Can Claim, Too
Not enough women are aware of the fact that if they were married to an ex-spouse for more than 10 years, they qualify for a portion equal to half of their ex’s Social Security benefits. There is no need to communicate with your ex to find out what benefits are available…instead, you can look up the benefit at the SSA website and apply online.
Moreover, when your ex dies, you may be entitled to a Widow’s Benefit.
Want to know more or dig into your own numbers? Start here at the Social Security Administration’s website. Starting to plan your Social Security strategies now, rather than later, will make all the difference when the time comes!