Planning for Social Security if you are a woman
I get this question a lot—should I wait to take my Social Security at age 70? Although, I get this one almost as often—should I start my Social Security benefits at age 62 so I don’t lose money if I die early/Social Security goes bust/I lose my job? The answer is, “It depends.” It depends on your finances, your savings, your planning. It depends on you.When I look at my own retirement and my own planning, I factor in something that 49 percent of the American population doesn’t have to factor in. I factor in the fact that I’m female.
It’s not the fact that I’m sexist. It’s the fact that I’m a realist. Women who reached 65 in 2010 can expect to live another 20.4 years while their male counterparts will live an expected 18.1 years according to the Social Security Administration. That fact suggests that while women really need to focus on their finances, men could stand a bit of health planning. Just saying.
So here are some financial concerns about being a woman (courtesy of Retirement-USA.org):
Percentage of individuals age 65 or older with a retirement benefit besides Social Security in 2008
- Males: 46.9%
- Females: 41.9% (either directly or through a spouse)
Percentage of beneficiaries who rely on Social Security benefits for half or more of their income in 2008
- Males: 50.3%
- Females: 58.3% (Older African-American and Hispanic women are especially reliant on Social Security, with 29.2 percent and 28.0 percent respectively having no other source of income in retirement, almost double the share of white women (16.6 percent)).
Poverty rate of individuals aged 65 or older in 2009
- Males: 6.6%
- Females: 10.7%
Median household income in 2008
- Married: $43,087
- Unmarried: $16,757
Under the federal poverty level in 2008
- Married: 4.9%
- Unmarried men: 11.6%
- Unmarried women: 16.9%
Number of poor (65+) in 2009
- Males: 1.1 million
- Females: 2.3 million
Average Social Security benefit in 2008
- Males: of $1,299 per month, or $15,588 per year
- Females: $1,001 per month, or $12,012 per year
Median income of individuals 65+ in 2008
- Males: $25,344
- Females: $14,429
Median annual income of individuals 15 and older in 2011
- Males: $48,202
- Females: $37,118
The timing for claiming Social Security depends upon more than your age especially if you are a member of a married couple. It depends upon the ages and differences in ages of both individuals in the relationship but it also depends upon your life expectancy, your full retirement age, your assets and other income including any you may bring in as a result of continued working.
When planning to claim for Social Security, it is very important for a couple to plan for the surviving spouse to ensure Social Security benefits are as large as possible during the time one or the other has been widowed. Since the one being left behind has a greater possibility of being the woman, it’s important that she take a personal role in ensuring her financial success when her partner no longer lives.
Given that women fall behind in all these categories, it makes sense for them to pay even greater attention to what amounts to one of their most important financial decisions. Social Security decisions continue to be felt years and even decades down the road from when they were initiated. It is advantageous to consider hiring a financial planner that specializes in maximizing Social Security benefits. A financial planner can assist with the creation of a plan to draw down savings, pensions or other benefits to delay drawing from Social Security for as long as possible as the difference between collecting Social Security at the right time and taking it at the wrong time can amount to tens of thousands if not hundreds of thousands of dollars. That’s money left on the table.
If you are a single woman, your Social Security decisions will be easier but the financial decisions necessary to support those decisions will not. You need a trusted financial advisor that understands the importance of the role Social Security will play in your life to secure your future. Consider hiring a Preferred Partner. Preferred Partners already recognize the importance of Social Security to retirement planning and understand how financial decisions will impact the rest of your retirement. You can find a Preferred Partner by going here.