Social Security and women.

You’ve earned it; so get the most out of Social Security

Whether you’re close to retirement or years away, married or single, you may not know the ins and outs of this important program.

What do you need to know? Well if you are one of the many women who will depend on Social Security for a portion of their retirement income, everything you can.

Here are the most important things you need to know.

Taking time off to have children

While Social Security no longer treats women and men differently, differences in the typical work patterns of men and women can impact the benefits women receive. Many women still leave paid employment for a least a short time after having children, and some do so for years. These gaps in earnings history may result in lower Social Security benefits.

Maximize your earnings just before you retire

Taking time off to have children can be offset, at least in part, by working longer and maximizing your earnings in the last years. The Social Security administration calculates your benefit amount by averaging the top-earning 35 years of your working life, after adjusting the earlier years for inflation. For each year over 35 that you earn more money, a lower-earning year is erased from the average.

It probably won’t be enough to live on

Social Security was designed to be a supplement to your income. Currently, in 2013 the average payout is $1,262 a month. That’s an annual income of $15,144. In 2013, the maximum benefit is $2,533 per month.

For about 23 percent of all married beneficiaries, Social Security represents 90 percent or more of their income. That soars to 46 percent of single beneficiaries.1

While it is difficult to predict exactly how much you’ll need to live in retirement, you probably have a good idea given your current spending and savings how much you’ll need in addition to Social Security to live comfortably.

It can pay to wait

You can retire early and collect Social Security payouts for a long time, or you can wait and collect higher payments for a longer time.

Why? Because you may end up living longer than you planned and the money will come in handy.

While the average 65-year-old woman can expect to live to 86, that’s just the average. Half of all women will live longer, many into their 90s, according to Social Security’s 2012 actuarial tables. To the extent that you can, then, it may make sense to get as much of a benefit as you can by delaying retirement. The difference can be significant.

For example, if a person retiring at 62 qualifying for $750 a month based on their average salary and working years waits until they are 66, they’d get $1,000. If they wait until they’re 70, they’d get $1,320, nearly double. This is according to the article, “When to Start Receiving Retirement Benefits” found on the Social Security website. You can also view the whole article here

Social Security benefits for spouses and widows

The spouse of a living retired worker beneficiary is eligible to receive, as early as age 62 with an actuarial reduction, a monthly benefit equal up to 50 percent of the retired spouse’s benefit. It’s possible for a lower-earning spouse to collect early, and then switch to a higher benefit later. Say you are the lower-earning spouse. Your husband can file for benefits at 66 but then opt not to receive them. That allows him to have the benefit amount continue to rise to age 70 and continue to work without penalty.

Because your husband has filed for retirement, you can retire and start collecting the spousal benefit, which would be one-half of your husband’s benefit amount.

Alternatively, if you are also 66 or older, you can continue to work without penalty. Since you haven’t filed for your own Social Security benefits, you can wait to age 70, and then shift to your own account and collect the maximum benefit.

If you are divorced, you can retire on your former spouse’s benefits as long as you were married at least 10 years.

In death cases where no young children are eligible for Social Security survivor benefits, the widow of the deceased can receive at normal retirement age, a monthly payout equal to 100 percent of the deceased’s accrued benefit.

Share and share alike

Your benefit will not be affected if other people, such as your spouse, former spouse or dependent children, receive Social Security benefits based on your earnings record.

It will be there when you need it

How many times have you heard somebody say that they assume Social Security won’t be there for them? The fact is that the program is fully funded until 2033, even if no changes are made.

That said, it’s very likely some changes will be made (e.g., benefits may be reduced, cost-of-living adjustments may be calculated differently, or the full retirement age may be pushed up).

If you’re approaching retirement, it’s likely that you’ll receive the benefits you’ve been expecting. If you’re still a long way from that date, it may be smart to plan for changes that may reduce your expected benefit.

This article is for information purposes only. Please contact the Social Security Administration at for information on your individual situation. Talk to your New York Life agent about different ways to prepare for retirement. For more information, click on the 'Talk to Us' button.

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Further Reading
  • 1 Social Security Administration, 2012