Women Are Missing Out on 30% of Social Security Retirement Benefits

When it comes to Social Security, timing is everything

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Many people eagerly look forward to the day when they can get out of the rat race and begin enjoying their retirement years, including millions of working women who are nearing retirement age across the U.S. But too many women are leaving big money on the table in order to do so, according to recent research.

Statistics on Women and Retirement

According to the Social Security Administration, more women collected Social Security benefits than men in 2017, the most recent year for which comprehensive statistics are available. The ratio was 55% for women as opposed to 45% for men, but this included adults of all ages and all Social Security benefits, not just retirement benefits. And approximately 12% of the women were receiving survivor benefits.

The economy can have a significant effect on when both men and women retire. The Social Security Administration indicates that 36.3% of women claimed benefits at age 62 in 2007, and this increased to 38.9% in just two years when America was in the throes of the recession in 2009.

A woman is generally eligible for either her own full Social Security benefits or half her spouse's benefits, whichever is greater, when she reaches full retirement age. If she claims benefits early at age 62, she only gets 73.3% of her benefits and a paltry 34.2% of her spouse’s benefits, according to the Social Security Administration.

Too Many Women Live Without 

Men generally have some other form of income in addition to Social Security, but women are five times more likely to survive on Social Security benefits alone. Women are often forced to take part-time jobs or rely on their children to make ends meet.

These situations regarding income and Social Security are changing somewhat, however, as Baby Boomer women are staying employed for longer periods of time and sometimes earning more than their spouses. Women of this generation—generally accepted as those being born between 1946 and 1964—are less likely to feel the need to tap into Social Security as soon as possible, at age 62.

But many older women don't fall into this demographic that works longer and earns more, and they simply do without. Housing used to be a staple of a retirement plan, but tax hikes have become so expensive in many areas that retirees can no longer afford to stay in the homes they worked so hard to buy.

Many are additionally faced with health issues that tap out resources in mere months, rather than the years they'd planned on living in retirement.

How to Get More From Your Retirement Benefits

Financial experts advise two strategies for women who want to live better when they reach retirement.

  • Start a retirement fund as soon as possible while you're still employed. Put away as many pre-tax dollars as possible in a conservative investment. A woman can easily accrue around $1 million in tax-sheltered retirement savings by the age of 70 if she begins saving $100 a month in a retirement fund starting at the age of 35.
  • Financial experts recommend holding off on collecting Social Security benefits until well after full retirement age. A woman can earn up to an 8% delayed retirement credit that can increase her benefits by as much as 32% if she waits until age 70. This doesn’t necessarily mean that she has to stop working or live without. Women can tap into their other forms of savings, reverse mortgages, and financial investments until this time.