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Social Security and Women, Relationship Status: It’s Complicated


As the baby boomer generation approaches retirement, financial and tax planners can expect increased demand for strategies that enhance Social Security benefits. Social Security is tremendously confusing. It has 2,728 rules and each of these have sub-rules and exceptions. Because average wages for women are still less than that of their male counterparts, an income-based benefit like Social Security is less for women. We have highlighted how some of the more specific wording and rules may leave women with less than they should be entitled to.


It’s better to wait…


62 years old is the age at which both women and men are allowed to claim their Social Security benefits. However, it’s usually better to wait to start claiming benefits to receive the maximum amount. Full retirement age is between 65 and 67, depending on the birth year. Why? Because the Social Security Administration reduces benefits for people who claim before their full retirement age. Filing for Social Security immediately upon eligibility means a woman’s benefit could be reduced by 20-30 percent, depending on her year of birth.

…But that isn’t always an option

Women do not always have other options for income during retirement because they may have chosen to be a stay at home wife or mother instead of working full time. In a recent article for CNBC, Shawn Britt, director of the advanced consulting group for Nationwide Insurance, said women are five times more likely to live only on Social Security.


Marital status


For married clients, you should do everything to maximize the higher wage earner's benefits. Assuming the husband is the higher earner, delaying his payments until age 70 can often help the wife down the road. Because women are statistically more likely to live longer than men, that maximum benefit will help make sure the wife is provided for through the remainder of her life.


For unmarried female clients, still advise them to wait. According to CNBC, women whose full retirement age is 66 would receive a benefit reduced by as much as 30 percent if she retired at 62, but if she waited until age 70, it could increased by as much as 32 percent.


To be a resource for your client’s as they reach retirement, consider registering for Surgent’s webinar, “Maximizing Your Social Security Benefit (SSR4). This webinar provides tax and financial planning professionals with both the background information on the Social Security system and the strategies clients will need in dealing with it. Sign up today!


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