Did you know that women have just 32 cents of net worth compared to $1 for men? That is a huge wealth disparity. This is why having a smart strategy around social security can be even more important for women.
We recently attended the Investment News Women Adviser Summit in Huntington Beach, California, where Social Security guru Mary Beth Franklin spoke on how women can maximize this important income source.
Providing financial planning that is mindful of the financial risks businesswomen have is the cornerstone of what we do at WealthChoice. Women have the gift of longevity, which means they spend more time in retirement, but often do so with less savings from lower earnings. Women also tend to live alone in retirement, and their costs of living are higher. And women rely more heavily on Social Security to supplement their other income sources. Making the most of this benefit becomes crucial.
Below are some of the highlights from Mary Beth’s talk and tips on how businesswomen can best leverage their Social Security benefits.
Considerations for all Social Security eligible beneficiaries:
-delaying your benefit to age 70 will increase your benefit by 8% for every year you defer beyond your normal retirement age.
-continuing to work can have a big impact on your Social Security benefit, so you need to know your options here.
-Medicare premiums are based on income and Required Minimum Distributions (RMDs), as well as all distributions from retirement accounts will be included in that income calculation. Having a strategy around retirement income and minimizing taxes may lower your Medicare premium and the taxes on your Social Security benefit.
Considerations for Divorced Women:
-Did you know that you can claim a Spousal Benefit on your ex’s earnings record even if the ex has not yet claimed Social Security? You must both be at least 62, divorced at least 2 years, had been married at least 10 years, and currently single
Considerations for Married Women:
-It usually makes sense for the higher earning spouse to delay benefits to age 70, and for the lower earning spouse to claim at their full retirement age if they are continuing to work.
-even if you have no Social Security benefits of your own, you may be entitled to a Spousal benefit
Considerations for Widows:
-Survivors are entitled to 100% of a deceased workers benefit
-Widows can collect survivor benefits and delay their own, allowing it to grow by 8%/year!
Considerations for Single Women:
-Delaying to age 70 may NOT be the best strategy for single women
There are many more strategies and the one that works best for you depends on your situation. We work with our clients to make sure that they are managing this benefit best. Please contact us if you have any questions about how Social Security fits in your personal financial plan.
