7 Things Every Woman Should Know About Social Security
7 Things Every Woman Should Know About Social Security

7 Things Every Woman Should Know About Social Security

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Social security is an important source of retirement income, especially for women. But how well do you understand the benefits you have?

Find out: 15 worst states to live by just a social security check
See: Are you doomed to work forever? What you can do if your social security is not enough

Here are seven things women should know about Social security in retirement.

1. Women face greater financial challenges in retirement than men

More women are dependent on social security than men, but their benefits are typically lower.

After all, the more you work and pay taxes, the more social security credits you earn, and the higher the benefit you receive. Still, the average total wage income for women is only $ 27,165 compared to $ 43,703 for men, according to a 2021 Fidelity survey.

Women also tend to receive smaller pensions and have fewer assets than men, but they usually live longer, according to the Social Security Administration (SSA).

To avoid financial challenges associated with retirement, women should invest wisely and understand what social benefits they are entitled to receive.

2. You can receive partial benefits at the age of 62 years

As long as you worked and paid Social Security taxes for at least 10 years and you have earned at least 40 work credits, you can start receiving partial benefits at 62, according to SSA.

If you wait until full retirement age to start receiving your benefits, you will receive 100% of your eligible benefits.

SSA considers “full retirement age” to be between 66 and 67, depending on your year of birth. See the diagram on page 7 of SSA Publication 05-10024 to see what your exact full retirement age is.

3. Marriage does not limit your social benefits

You and your spouse can apply for Social Security benefits separately and individually, said Christopher Liew, a CFA charter holder and founder of Wealthawesome.com. But you must both have worked before, and you must have separate service records.

“That means if you have a $ 2,000 monthly claim and your spouse has a $ 1,500 monthly claim, then your combined retirement benefits should reach $ 3,500 a month right away,” he said. “Surprisingly, you are not limited to receiving 50% of your spouse’s pension.”

4. If you are entitled to 2 benefits, you generally get the higher rate

If you are married, you may be entitled to one-third to one-half of your spouse’s social security benefit. This is useful for women with a low work record.

However, you will probably only receive the benefit with the highest rate – not both. This is why most working women in retirement receive their own social security benefit, not that of their spouse.

“The social security benefit paid to you as a spouse will be the higher amount between your spouse’s social security benefit and your social security benefit, respectively,” Liew said. “You can not have both.”

5. Working during retirement can reduce your social security payments

You are entitled to receive a reduced amount of your social security benefits at age 62. However, if you decide to continue working while receiving these benefits, SSA will reduce your payouts by $ 1 for every $ 2 you earn above the $ 19,560 annual limit in 2022.

If you continue to work in the year you reach full retirement age, SSA will reduce your benefits by only $ 1 for every $ 3 you earn above the annual limit ($ 51,960 in 2022). After that year, you will not get your benefits reduced in this way.

6. Widows can receive their spouse’s social security benefits

At age 60, a widow can receive 71% of her deceased spouse’s benefits. This figure rises to 100% when a widow reaches full retirement age.

If you lived with your spouse when they died, you may be eligible to receive a one-time payment of $ 255 from SSA.

7. If you are divorced, you may still be entitled to your ex benefits

You may think that once you are divorced, you will lose all the financial benefits that come with marriage. But when it comes to social security, that is not necessarily the case.

If you and your ex-spouse were married for at least 10 years and you are currently unmarried, you may be able to receive benefits based on their work. (This does not reduce the benefits they receive.)

“Just make sure you both were not married to someone else at the time of Social Security retirement,” Liew said. “The size of the social security pension you can receive depends on your ex-spouse’s service.”

Some women may sign a decree during the divorce process to waive their rights to their ex-spouse’s social security benefits. But the SSA rarely enforces these decrees.

If your ex-spouse is dead, you can still receive benefits based on their work if you are 60 or older (or 50 if you have a disability).

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This article was originally published on GOBankingRates.com: 7 Things Every Woman Should Know About Social Security

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