One of the reasons Social Security checks can cover bills for some retirees and not others is because benefits are based on income earned before retirement. The more you earn working, the more you pay into the Social Security system, and the higher your benefit. Two retirees can work the exact same number of hours and years but still have drastically different Social Security checks.
This goes a long way toward explaining why the average Social Security check for women is much smaller than for men. As of May 2022, men received about $1,848 per month on average, USA Today reported. In contrast, the average monthly check for women was only $1,494 per month — a difference of about $354 per month, or $4,248 per year.
If you want to know how much that difference adds up over the course of a retirement, consider this: During a 20-year retirement, the average man will receive about $85,000 more in Social Security benefits than the average woman. Over 30 years, the difference is more than $127,000.
You don’t need an economics degree to figure out why: It’s because women have consistently earned less than men over the decades — and that pay gap still exists. Heading into 2022, women earned 82 cents for every dollar men, according to the Society for Human Resource Management, which cited research from Payscale’s 2022 State of the Gender Pay Gap Report.
Women are also much more likely than men to leave the workforce to care for children. The result is that they don’t earn nearly as much money as men over the course of their professional lives. This has a major impact on their Social Security retirement benefits, which are based on income during your 35 highest-earning. When someone drops out of the workforce for a substantial number of years, those zero-income years are factored into the benefit calculation, which shrinks checks even more.
There have been some encouraging developments, however. The Social Security gender gap has been slowly narrowing over the last few decades as the gender pay gap shrinks as well. As USA Today noted, in May 2000, women received less than 77% of the average man’s Social Security check. As of May 2022, the difference was closer to 81%.
For women (and others) in the working world who want to help increase their Social Security benefits in retirement, the best strategy is to find opportunities to boost income. Consider asking for a raise, obtaining licenses and certifications that can lead to higher pay, or switching to a better-paying job. If you can’t work outside the home due to caretaking responsibilities, look for remote jobs or side hustles that can bring in income.
Just keep in mind that if you do get a side hustle that involves 1099 income rather than W-2 income, you’ll need to pay into Social Security on your own through estimated tax payments or on your tax returns.
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It’s also important to earn income for at least 35 years, even if some of those years only involve working part-time or side gigs. If you can make it past 35 years while earning a high income, the higher-earning years will replace any lower-earning years that came earlier.
Another way to boost your Social Security check is to delay signing up for benefits as long as you can. Although you can sign up as early as age 62, waiting a few years will lead to a higher Social Security check.
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