Women and Social Security: How to Get the Biggest Check

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Karen Callahan, a single childless woman, is putting together the financial pieces that will potentially protect her for a long life. A big piece of the puzzle: take as much as you get Social Security he comes as best he can.

Ms Callahan, 67, from Marlborough, Mass., expects to claim their benefits until she turns 70, when she will be eligible for $3,100 per month. He said that if he requested it today, his salary would be permanently reduced to about $2,500.

Her income from a web design business she owns will cover her expenses of up to $70, including her $375 monthly apartment fee in the townhouse. In excellent health and able to bench press 120 pounds, Ms. Callahan hopes to live long enough to achieve more by waiting rather than demanding less for longer.

“Hell bells – I invested the money and I’m going to the max,” he said.

Experts say it’s crucial to get the most out of Social Security for many older single women, as well as divorced women and widows. Women tend to live longer than men and are more dependent on Social Security as their primary source of income. Also, benefits are smaller on average, partly due to lost earnings or years of part-time work caring for children and elderly relatives.

Still, a retirement counselor in Plymouth, Massachusetts, and “What is Social Security for Women?” Author of the book, Marcia Mantell, says many women leave a significant amount of money on the table with this guaranteed inflation-adjusted money supply.

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

Ms Mantell said young women with years of work ahead of them can start maximizing benefits by looking for a job with more money and asking for a raise that “provides a higher benefit payout tomorrow.”

It’s helpful to know the basics to start cutting the swamp. A key concept is known as full retirement age – the time when a person is entitled to full benefits based on their earnings. A person born between 1943 and 1954 can claim full retirement benefits at age 66. For those born in 1960 and later, the full retirement age is gradually increased to 67.

The earliest a person can claim is 62, but the entitlement will be permanently reduced by a certain percentage for each month claimed by the beneficiary before reaching full retirement age. For example, a woman with full retirement age of 67 Claiming at age 62, she will receive 70 percent of her full benefit.

For each year a beneficiary defers claim between full retirement age and age 70, the benefit increases by 8 percent; this is known as delayed retirement credit.

For couples, including married same-sex couples, a low-earning spouse can claim “spousal” benefits on their spouse’s 62-year-old employment record, but only if the other spouse has started collecting it. At full retirement age, the lower earner can receive a spousal benefit that is 50 percent of the higher earner’s full retirement benefit.

A potential beneficiary may be online To check the Social Security Statementshows a record of his annual earnings and provides estimates of how much he will receive based on that record by claiming at full retirement age or 62 or waiting until 70.

Experts say that a single woman who has never been married or whose marriage is short-lived should delay seeking help as much as possible.

Let’s say a 67-year-old woman will receive a monthly allowance of $2,000. If he claims to be 62 years old, he will receive $1,400. If he waits until he’s 70, his earnings will be $2,480 – a 77 percent increase in lifetime monthly income.

“For single women, longevity is the biggest risk,” Ms Mantell said. “Just waiting another year to pass retirement age will give him another 8 percent benefit.”

According to research by William Reichenstein and William Meyer, unless a person dies relatively early, a person’s total lifetime benefits from delay are likely to reach the age when they exceed the total lifetime benefits of previously claiming smaller benefits. They are the principles Social Security Solutions, a company that uses pioneering software to help individuals and couples maximize lifetime benefits.

This possibility is especially true for women. According to the U.S. Administration on Aging, the average life expectancy of 65-year-old American women in 2019 was 85.8 years.

Baylor University professor emeritus Dr. “Unless she’s shorter than the average life expectancy of a single woman, she can maximize her benefits by waiting until age 70,” Reichenstein said.

A single woman can also increase her benefits by delaying her retirement. The Social Security Administration calculates monthly benefits by examining a beneficiary’s highest paid 35 years. Even part-time work can replace any “zero” for years of babysitting.

Ms Callahan said she expects her income from working longer to replace years of low-earning employment as well as years when she started a job and became a teacher and didn’t pay into the Social Security system, but instead received a pension. (Government employees in about a dozen states Not covered by Social Security.)

Maybe women who lost their jobs during the pandemic and applied for early benefits have a chance again. One option is to “suspend” benefits at full retirement age and restart later, perhaps at age 70.

“Delinquent retirement loans mostly compensate for reduced payments due to early demand,” Ms Mantell said.

After a divorce, women are often worse off financially than men, but a former spouse can mitigate that blow by claiming a spouse or survival allowance on their ex-husband’s business record.

“Many women who spend years caring for their children get divorced after decades of marriage,” said Michelle Petrowski, a certified financial planner specializing in divorce issues in Scottsdale, Arizona. “They haven’t had the opportunity to earn an income or donate to a 401(k) and are relying on that benefit.”

For a divorced woman to receive spousal benefits, 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 make a claim even if her ex-husband hasn’t asked for help yet.

A divorced woman waiting until full retirement age can claim spousal benefits of 50 percent of her ex-spouse’s full benefit. Benefit decreases by a certain percentage for each month collected before that time.

This higher benefit can add up to an important retirement cat for a woman whose marriage may have ended decades ago.

Dr. “Think of a woman whose ex-husband has a full salary of $2400,” Reichenstein said. Perhaps his own benefit at full retirement age is $800. If she applies for spousal benefits at age 67, she will receive $1,200 per month, up to $259,200 by age 85. If he claims it at age 62, his monthly allowance will be $830 – a drop of $30,000 by age 85.

A woman with two or more ex-wives who has been married for 10 years can choose the highest spousal benefit. And if one of the ex-spouses dies, they can move on to a larger survivor benefit. The ex-spouse loses spousal benefits when she remarries.

An ex-husband is not notified when his ex-wife applies for a benefit on her record. Neither his receivables nor any spousal benefits of his present wife will be reduced.

According to the Social Security Administration, about 32 percent of all widows receiving Social Security “surviving” benefits in 2018 were between the ages of 60 and 70.

Laura Mattia, a certified financial planner at Atlas Fiduciary Financial in Sarasota, Fla., said increasing the “benefit” for widows in this younger group is crucial. “said.

A widow claiming a death benefit at full retirement age is entitled to 100 percent of the benefit her late spouse receives or is entitled to receive. A widowed woman can claim up to age 60 (50 if disabled), but her allowance will be permanently reduced for each month she claims before full retirement age. A younger widow may be eligible if she is taking care of the late spouse’s children.

A widower in her late 50s or early 60s with no or very little income will likely receive the largest lifetime payout, waiting to claim 66 or 67. However, Dr. Mattia said, “The decision about when to claim is complicated if there is more own worker money. ”

A widow receiving an earnings-based pension has several options.

One option is to claim your own smaller retirement benefit at age 62 and then switch to a larger survivor benefit at 66 or 67. In this way, the 62-year-old creates a stream of income while the survivors increase the size of their allowance.

But a spouse whose pension at 70 will be more than their survivor benefit should receive their survivor benefit early, perhaps at 60 or 62, and allow their interests to grow, backed by overdue retirement loans.

Dr. “The most important rule of thumb for a widow is to compare the retirement pay at age 70 with the full death benefit that starts at full retirement age,” Reichenstein said.

Dr. Mattia said a husband has a huge role to play in ensuring his wife’s financial security after her death. She often advises husbands to claim their own alimony up to age 70, thereby increasing the widow’s pension.

Dr. “He might think, ‘I’m not going to live that long,’ but in the meantime he might live much longer,” Mattia said.

Whatever strategy a woman uses, financial planners say Social Security should be just one part of her retirement income stream. Ms. Callahan said that by the time she’s 70, she expects to pay half of her expenses, including travel, in three things: profits from selling her business, assets in her retirement account, and possibly money from a part-time job.

Social Security will cover the other half. He said waiting until age 70 for collection would give him a much better chance to “live the lifestyle I want to live.”

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