What Women Should Know About Social Security

For over 80 years, Social Security has promoted the financial security of American taxpayers. Social Security helps retirees continue to receive compensation after they leave the workforce and enter into their golden years. Many women know that when they reach retirement age, Social Security will provide a source of income. There are a few other things women should know about Social Security so they do not miss out on any benefits they are eligible for.

You’re eligible for your own Social Security benefits

Every person in the United States that has earned at least 40 work credits is eligible for their own Social Security benefits. Benefits are for those who work and pay taxes into the Social Security system. Each quarter that someone works, they earn one credit, thus earning a maximum of four credits per year.

Every person’s retirement benefit is calculated in the same way. It’s based on a monthly average of a person’s income for up to 35 years. If a person becomes disabled during their working years and is forced to retire early, they might qualify for disability benefits permitting that they worked and paid Social Security taxes for at least five of the last 10 years.

Once a person reaches age 62, they are eligible for their own Social Security retirement benefit regardless of marital status, and regardless of if their spouse collects Social Security. Therefore, every woman is eligible for Social Security. This is true even if their partner or spouse is already receiving Social Security benefits.

Even if you did not work but your spouse did, you’re eligible for Social Security benefits. In this case, you will receive about half of your spouse’s benefit when you reach retirement age.

There are limits to the amount of Social Security benefits a married couple can receive

How much you earn and how many years you work determines the amount of your Social Security benefits. The retirement benefit is typically about 40% of the amount of a person’s wages per month during their working years. The benefit amount will also adjust for inflation.

For example, let’s say that a married man earns $1,400 per month from Social Security and a woman earns $1,200 per month. The couple will receive $2,600 per month. They do not have to choose which spouse’s income to take each month as they will both receive an income.

If a woman never worked outside the home, she could receive an amount equal to one-half that of her spouse’s income. To continue the previous example, if the man earns $1,400 in benefits in retirement, the woman will earn $700 per month and they would earn $2,100 total per month.

You will only receive one benefit

Many times, one spouse outlives the other. If your spouse dies and they were the breadwinner, you’re eligible to receive the larger of the two individual benefits. This is one of the most important things that women should know about Social Security. This is because, depending on their health and the health of their spouse, they may only have one source of income. In the case of their spouse’s death, only one income will remain.

Let’s continue the previous example where the spouse earned $1,400 per month and the woman earned $1,200 per month. In the event of the spouse’s death, the woman is eligible for a benefit of $1,400 per month. She cannot receive the $1,200 per month benefit as well.

It’s possible to receive your ex-spouse’s benefits

Those who divorce may still rely on their ex spouse’s income. As long as your marriage was over 10 years before getting divorced and your ex-spouse dies, you might be eligible for their benefits. To become eligible for your ex-spouse’s Social Security after their passing, women must be single. If the ex-spouse has remarried, the surviving spouse is still eligible for their benefits while not impacting the current spouse’s benefits.

It’s possible to receive Social Security benefits as a widow

Losing your spouse is a traumatic experience. This is especially true if you have concerns about affording your lifestyle after their passing. Fortunately, to help eliminate some of the financial burden widows face, Social Security provides a widow benefit. As a widow, you’re eligible for between 71 percent (at age 60) and 100 percent (at full retirement age) of what your spouse was receiving before they died. The widow benefit can also apply to ex-spouses depending on the type of situation and marital status.

With this benefit, you’ll receive your benefit first. Then, the Social Security Administration will supplement it with whatever extra benefits you are due as a widow. Additionally, you will receive a one-time $255 death benefit.

Conversely, if you pass before your spouse and earned more over your working years, your spouse is possibly eligible for survivor’s benefits. Permitting that you meet work requirements to qualify for Social Security benefits, your spouse and children are eligible for a survivor’s benefit. This is true as long as your children are under age 18 or your spouse is over age 60.

The bottom line

Another important thing that women should know about Social Security is that it is not a financial plan. Instead, it’s simply a piece of the entire financial planning puzzle. While Social Security is a source of income in retirement, it’s not wise to rely solely on your Social Security benefits to support your retirement lifestyle. You’ll want to meet with a financial planner who can help you figure out the rest of your financial puzzle.

If you’re looking for a financial planning partner who can help you figure out how Social Security plays a role in your financial plan, we have financial planning offices in Redmond, Seattle, Mill Creek, the Tri-Cities region, and Denver. Our firm focuses on helping retirees and those preparing for retirement achieve financial freedom by creating a plan that shows them how they can have the income they need and want until they turn 100.

If you’re ready to take the first step in achieving your retirement goals, our team is ready to assist you. We’ve helped hundreds of couples and individuals smoothly transition with confidence, and we’d like to do the same for you.

Related: Seven Common Mistakes to Avoid Making with Your Retirement Money