Whether you are single, widowed or divorced, Social Security can become a very important source of money during your retirement.
The facts are that women live longer than men and many have lower Social Security benefits due to their lower wages and the time they have taken away from work in order to care for others whether that be children or parents. Social Security benefits for women therefore can be more essential than for men.
The basics of Social Security
Full retirement age: when an individual is entitled to her full benefit based on her earnings. A woman born between 1943 and 1954 can claim a full retirement benefit at age 66. The full retirement age gradually increases to age 67 for those born in 1960 and later.
The earliest that a person can claim a Social Security benefit is at age 62. However the benefit will be permanently reduced for each month the individual claims before reaching full retirement age.
On the other hand, for each year that an individual postpones claiming her benefit between full retirement and age 70, the benefit rises by 8%, for life.
If you are single, how to get more benefits
For a single woman, whether one who never married or one whose marriage lasted for a short time, it is generally recommended that she should wait as long as possible before claiming her Social Security benefits.
For a single woman, longevity is your biggest financial risk. Just by waiting one more year, you can increase your benefit by 8% for life.
According to the U.S. Administration on Aging, as of 2019 the average life span for a 65 year old American woman is 85.8 years. This is just an average for the entire country. Those with higher incomes and better health care benefits will most likely live longer than the average.
Unless you have a family history of poor health, waiting to age 70 can be of significant benefit for the rest of your life.
Women who have decided to claim early for reduced benefits have a chance at a do-over. One option is to suspend your benefits at full retirement age and restart it later perhaps at age 70.
If you are divorced, how to get more benefits
Financially, women generally fare worse than men after a divorce. However an ex-wife may be able to ease the pain by claiming a spousal survivor benefit on her former husband’s work record.
For a divorced woman to be eligible for a spousal benefit, both spouses must be at least age 62 and the marriage must have lasted 10 years or more. Unlike a married woman, a divorced woman can claim even if her ex-husband has not yet filed for his benefits.
A divorced woman who waits until her full retirement age can claim a spousal benefit that will be 50% of her ex-spouse’s full benefit. The benefit is reduced by a certain percentage for each month she collects before then.
If you are a widow, how to get more benefits
Approximately 32% of all widows who received Social Security survivor benefits in 2018, were between the ages of 60 and 70 according to the Social Security Administration, (www.ssa.gov).
Widows who claim the survivor benefit at full retirement age are eligible for 100% of the benefit their late spouse was receiving or was eligible to receive. Widows can claim as early as age 60 (50 if disabled) but your benefit will be reduced permanently for each month that you claim before full retirement age.
A widow in her late 50s or early 60s who has little or no earning of her own will likely reap the largest lifetime payout by waiting to age 66 or 67.
A widow who has a retirement benefit based on earnings has several options. One option is to claim your own smaller retirement benefit at 62 and the switch to the larger survivor benefit at age 66 or 67. This method gives you an income stream at 62 while increasing the size of her survivor benefit.
A widow whose retirement benefit at age 70 is larger than the survivor benefit should take the survivor benefit early and let her benefit grow boosted by delayed retirement credits.
Bottom line: compare your Social Security retirement benefit at age 70 to your full survivor benefit which starts at your full retirement age.
What can you do?
At Retirement Solutions, we employ a sophisticated software program that will analyze your unique situation and then determine which of the options will provide you with the highest payout. Social Security claiming is complex and confusing. We can assist you with your decision so that you make the right decision the first time.
Let us know if we can assist you by clicking the “Schedule a Consultation” button in the upper right corner of this page.