Women must thoroughly understand Social Security, considering they often outlive men while earning less. It’s essential for women to be knowledgeable about their Social Security benefits.
Five Things a Woman Should Know About Social Security
According to Kiplinger, it is essential to keep in mind that Social Security was not designed to serve as your only means of financial support during your retirement years. While it can provide some level of income, it is crucial to have additional sources of retirement funds in place to ensure a comfortable and secure lifestyle in your golden years.
It is crucial for women to prioritize their Social Security benefits, especially given their longer lifespan and lower income. Nevertheless, the intricate nature of the program can make it quite arduous to navigate, as it contains numerous rules that are often unfamiliar to the average person. Acquiring knowledge on how to optimize Social Security benefits can make a significant difference in enhancing one’s standard of living during retirement years.
Here are five things a woman should know:
Understanding Social Security: A Brief Explanation
Social Security bases retirement income on lifetime earnings with eligibility for at least 40 work credits earned over 10 years. The benefits are determined by the 35 years in which you earned the highest income. Women with caregiving responsibilities often face reduced benefits, receiving 80% of what men receive on average.
Maximizing Your Retirement Income: Incorporating Social Security into Your Financial Plan
Starting Social Security at age 62 may result in a reduced benefit compared to waiting until full retirement age. Delaying beyond full retirement age can give you an 8% bonus each year. It’s important to consider Social Security’s role in your financial plan and continue working if possible. Otherwise, tapping Social Security may be necessary to make ends meet.
Coordinating Social Security Benefits with Your Spouse
Maximize your Social Security benefits by working together with your spouse. Couples can maximize Social Security benefits by starting the lower-earning spouse’s benefits at 62 and waiting until 70 to tap the higher-earning spouse’s benefits. This strategy can benefit women who tend to outlive their spouses. Survivor benefits can be claimed at age 60 if your late spouse worked long enough to qualify or at full retirement age for the full benefit amount.
“Gray Divorce” Creates Complications for Social Security
Divorce rates for people over 55 have increased drastically, with over 34% of divorces in the past year being from this age group. This means that divorced women will have fewer assets to work with in retirement, and Social Security will play a bigger role. If a woman was married for at least 10 years and hasn’t remarried, she can receive either her own Social Security or half of her ex’s, depending on which is bigger. Drawing off of an ex’s benefit will not lower the amount they receive.
Maximizing Social Security for Retirement: Tips and Advice
Social Security is an important part of retirement income, but it won’t replace all of it, especially for those with higher pre-retirement incomes. It’s best to view Social Security as a Source of funds for health care expenses in retirement. Working with a financial adviser to maximize Social Security can be helpful.
The five things a woman should know about Social Security can be a valuable source of income for women, whether you’re retired, disabled, or dealing with the loss of a spouse. By understanding the benefits and requirements of the program, you can make informed decisions that will help you and your family in the years to come.