Social Security for Women: 5 Smart Retirement Strategies
Written by
Heather Altamirano
Edited by
Cory Dudak
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When it comes to planning for retirement, women face unique financial challenges that can negatively affect their Social Security benefits. These include longer life expectancies compared to men, the gender pay gap and more frequent employment breaks, which can result in lower lifetime earnings. Therefore, women have a higher risk of outliving their savings, so having a strategic plan of action for retirement is crucial.
By understanding how to optimize Social Security benefits, you can take control of your financial future and enjoy a more secure retirement. Here are four ways to stretch your savings and help ensure financial independence in your golden years, according to experts.
Know How To File
Social Security can be confusing, and many women don’t realize they may be eligible to collect certain benefits, such as those from an ex-spouse’s earnings. Knowing how to file is a smart way to ensure you receive your full monthly payout.
“If you are divorced, yet were married for 10 years or more, still unmarried, and over the age of 62, did you know that you can collect on behalf of your ex?” Eric Mangold, CWS Founder of Argosy Wealth Management, noted.
Marital status is just one of many factors that can have a significant impact on the collection of Social Security benefits for woman, according to the Social Security Administration (SSA).
Per Mangold, “If you are married and both you and your husband work, you should review your filing options to see if it makes sense for you to file first, or for your spouse to file first.”
However, if you are single and never married, you’ll want to review how much your Social Security benefit would be at various ages. One thing Mangold stressed not to do is rely on someone at Social Security for help with filing. Instead, hire a trusted financial advisor.
“While you may find someone at the SSA office who is willing to help you, they technically are not supposed to give you advice on your filing strategy,” Mangold said. “They are only supposed to guide you on what you need to do to file because they aren’t experts in filing strategies; only the process of filing.”
Delay Claiming Social Security Benefits
People can claim Social Security at 62; however, the monthly benefits would be reduced. To help stretch money coming in from the program, Leslie H. Tayne, Esq., Finance and Debt Expert and Founder of Tayne Law Group, suggested delaying until age 70 when the full benefits kick in. However, this depends on several factors, including health and financial needs.
“When you delay claiming your Social Security benefits, you are investing in your future, and your future self will thank you for the extra cash,” Tayne said. “It’s also worth noting that since women typically live longer than men, their retirement benefits need to be more lucrative, so this strategy is a great way to ensure their retirement fund will be valuable to them in the future.”
Investing Unneeded Funds in Assets
Another way for women to maximize their Social Security benefits is to invest in bonds, high-yield savings accounts or mutual funds.
“Funneling extra cash from Social Security into safe investment options is a great way for women to have a consistent income or a predictable return,” Tayne explained. “Stock options, such as bonds, are typically safer than stocks, and may be a better choice for a woman investing later in their life,” she added.
Maximize Survivor Benefits
Social Security survivor benefits provide monthly payments to eligible family members of a deceased beneficiary who paid Social Security taxes, and preparing to file for survivor benefits in advance is a clever move for women.
“If your partner makes more income than you, it may be valuable for you to claim your benefits earlier, and then switch to the higher survivor benefit after your spouse passes,” Tayne said. “This method will significantly increase overall lifetime earnings.”
Check Your Social Security Records for Errors
Errors on your Social Security record can happen and, if not caught, can become costly. As a debt attorney, Tayne highly recommended people check their credit reports once a year.
“Check the income listed that your Social Security is based on for any errors, as mistakes can negatively affect your total benefit sum,” she said.
Navigating Social Security is often overwhelming, but with the right approach, women can take control of their financial futures.
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