SOCIAL SECURITY PLANNING FOR WOMEN
every $2 in benefit above that level. Your full retirement age is based on the year you were born.
If he was the primary breadwinner, if he can, wait to age 70 to take his social security to maximize the benefit. For every year that you delay the benefit up to age 70, your benefit will increase by about 8% per year. Once you start your benefit, it only goes up by the cost of living, for example, 1.3% in 2021. The decision of when to take your social security is a personal one that affects both of you, not just one. Because women usually outlive the gents, that means that the higher benefit will be paid to the surviving spouse for the rest of his/her life. If a woman takes her benefits too early, those monies can be reduced by up to 30% if you file at age 62. Check out your benefit amounts by going to www. SSA.gov, go to retirement planning and enter your information. You can see what your benefits for both of you would look and can see what your benefits would be at different ages. Spousal benefits are about 50% of his benefits so you can see which is the higher benefit amount based on his work record or on yours. You’ll be able to select whichever one you want. Once a spouse dies, only 1 social security check will continue, the lower of the two will get turned off. For example, Joe and Margie had 2 social security checks coming in, his for $2000 and hers for $1000 per month. Once Joe passed away, Margie was able to
continue Joe’s check but hers was eliminated. That resulted in a third of her income being eliminated. Now she had to try to live on $2000 per month. Many families are getting life insurance to fill the gap. That’s part of the planning ahead, it’s less expensive if you get it at age 50 or 55 rather than waiting until retirement at age 65. It’s even more concerning for single women. If you’ve never been married or were married less than 10 years, you don’t have access to spousal or survivor benefits. Men usually make at least 30% more than women so your benefits will be based only on your income. Are there any other income streams besides social security in your retirement? Have you been putting away money for your retirement in a 401K or investment accounts? Once you stop working, you may want to put some of those funds into an annuity what will pay out for the rest of your life so you’ll ensure that revenue stream continues. You may have to continue to work past 65 and try to wait until 70 to maximize your social security income. Again, every year that you wait gets another 8% bump in monthly benefit. If you choose to work while receiving Social Security benefits before you reach your full retirement age, your benefits can be reduced if you make more than $18,240, you’ll lose $1 for
Year of Birth 1943-54 Age 66 1955
66+2 mos. 66+4 mos. 66+6 mos. 66+8 mos. 66+10 mos.
1956 1957 1958 1959
1960 +
67
Please do some planning. Social Security was never designed to be the only income stream in retirement but I see too many women trying to survive their retirement on $800-$1000 a month. If you are 65 or older, blind, or disabled with limited income and with limited resources, you may be eligible for Supplemental Security Income (SSI). In addition, you may get “extra help” paying for your Medicare prescription drug plan paying for monthly premiums, deductibles, and copays. Both of these would be available by applying through Social Security. You’ve got some homework to do. Know what your future income streams look like to make adjustments if necessary ahead of your retirement. Don’t wait until you get surprised at 65. If you’d like to visit with Rebecca Nordquist at Phares Financial, call 308- 532-3180. The office is located at 319 East B Street in North Platte.
By Rebecca Nordquist, RD, MHA, CLTC
As we think about the Day of the Woman this month, let’s highlight an issue that many men or women don’t think about. Yes, there is a difference in retirement planning for men vs women. The life expectancy is longer for women, 86 years compared to 84 for men. Consequently, the planning needs for women should focus heavily on longevity and creating lifetime income streams after her spouse has passed away. Social security is a lifetime income stream and usually replaces about 40% of pre-retirement income. Many couples just assume that when hubby retires and starts to get his social security, she should start taking hers too. Not so fast! Social Security planning should be starting 10-15 years before retirement.
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