Women, in particular, rely heavily on Social Security as a source of retirement income. But how well do you know the advantages you’re entitled to?
1. In retirement, women face more financial difficulties than men
Women are more likely than men to rely on Social Security, but their benefits are often lower.
After all, the more you work and pay taxes, the more Social Security credits you accumulate and the larger your benefit. According to a 2021 Fidelity poll, the average total pay earnings for women are only $27,165, compared to $43,703 for men.
According to the Social Security Administration, women earn smaller pensions and have fewer assets than males, but they live longer (SSA).
Women should invest properly and understand what Social Security benefits they are entitled to in order to prevent financial difficulties in retirement.
2. At the age of 62, you may be eligible for partial benefits
According to the SSA, you can begin collecting partial benefits at the age of 62 if you worked and paid Social Security taxes for at least ten years and earned at least 40 work credits.
You will receive 100% of your qualifying benefits if you wait until you reach full retirement age to start receiving benefits.
The Social Security Administration defines “full retirement age” as being between the ages of 66 and 67, depending on your birth year. To find out your exact full retirement age, look at the chart on page 7 of SSA Publication 05-10024.
3. Your Social Security benefits are unaffected by marriage
According to Christopher Liew, a CFA charter holder and creator of Wealthawesome.com, you and your spouse can claim Social Security benefits independently and individually.
However, both of you must have past work experience and distinct service records.
“That means if you have a $2,000 monthly claim and your spouse has a $1,500 monthly claim, your combined retirement benefits should suddenly reach $3,500 monthly,” he explained.
“You are not limited to receiving 50% of your spouse’s pension, which is surprising.”
4. If you’re eligible for two benefits, the higher rate is usually paid.
You may be entitled to one-third to one-half of your spouse’s Social Security payment if you’re married. This is beneficial for women who have a poor employment history.
You will, however, most likely obtain only the benefit with the highest rate, not both. That is why, in retirement, most working women receive their own Social Security pension rather than their spouse’s.
“The Social Security payment paid to you as a spouse will be the greater of your spousal Social Security benefit and your own Social Security benefit,” Liew explained. “You can’t have both,” says the narrator.
5. Working while retired can reduce your Social Security benefits
At the age of 62, you may be eligible for a decreased amount of Social Security benefits. However, if you continue to work while receiving benefits,
the Social Security Administration will lower your payments by $1 for every $2 you earn over the yearly maximum, which is $19,560 in 2022.
If you continue to work after reaching full retirement age, the Social Security Administration will only lower your benefits by $1 for every $3 you earn beyond the yearly maximum ($51,960 in 2022). After that year, your benefits will not be lowered in this manner.
- Social Security Benefits Amounts Are Determined by Five Factors!
- Make Sure You’re Ready for a Possible Rise in Social Security Benefits!
- When Will You Receive Your Fourth Cola Social Security Check?
6. Widows who have lost a spouse may be eligible for Social Security benefits
A widow can collect 71 percent of her deceased spouse’s benefits at the age of 60. When a widow achieves full retirement age, this percentage jumps to 100%.
If you were living with your spouse at the time of their death, you may be entitled to a lump-sum payment of $255 from the Social Security Administration.
7. You May Still Be Eligible for Your Ex’s Benefits If You’re Divorced
You may believe that if you get divorced, you lose all of the financial advantages that come with marriage. When it comes to Social Security, though, this isn’t always the case.
You may be eligible for benefits based on your ex-work spouse if you and your ex-spouse were married for at least 10 years and are currently unmarried. (However, this has no bearing on the benefits they receive.)
“Just make sure you weren’t married to someone else at the time you were eligible for Social Security pension benefits,” Liew advised. “The amount of Social Security pension you are eligible for is determined by your ex-service spouse’s record.”
During the divorce process, some women may sign a decree relinquishing their rights to their ex-Social spouse’s Security benefits. However, the SSA rarely follows through on these orders.
If you’re 60 or older and your ex-spouse has died, you may still be eligible for benefits based on their work (or 50 if you have a disability).