When Social Security was initially established in the 1930s, it primarily focused on the traditional family structure. However, in today’s world, the modern woman faces unique circumstances. She works full-time, earns less than men, has a longer life expectancy, and often takes on caregiving responsibilities for both elderly parents and young children.
Considering the gender pay gap, longer life spans, and shorter work histories, women need to carefully assess how and when they claim Social Security to make sure they receive their rightful benefits later in life. However, the stakes are even higher for single, divorced, and widowed women. Nearly 50% of older single women rely on Social Security for at least 90% of their income, compared to only 21% of married women. This statistic highlights the increased dependence of single women on Social Security. If you belong to this group, it’s crucial to create a plan that supports you while understanding the ins and outs of claiming your benefits.
Many women make the mistake of claiming Social Security as soon as they’re eligible. Few wait until full retirement age, and even fewer wait until age 70. But your benefit amount increases by 8% each year from 66 to 70, plus cost of living increases for inflation, so it pays to wait.
For example, let’s say your full retirement age is 66 and your monthly payment is estimated to be $2,000. The chart below shows how much you’d get every month if you started collecting at age 62 (reduced benefits), 66 (full benefits), and 70 (increased benefits).
| If you start collecting benefits at this age… | your monthly payout will be this much… |
|---|---|
| 62 | $1,500 |
| 66 | $2,000 |
| 70 | $2,640 |
Just by waiting until age 70, your monthly payout increases substantially, which could lead to thousands of more dollars throughout your retirement for you to invest or gift to others.
But when you should claim benefits isn’t as simple as waiting until age 70. Your health, home, and personal circumstances could indicate otherwise. Maybe you find out you have advanced-stage breast cancer, so you start taking benefits at age 62. Or maybe you are in good health and since you have plenty of other resources, you wait until age 70. Tailoring your claiming strategy to your unique life circumstances is key, and a professional can help you take all factors into account.
This may come as a surprise, but divorcées can claim their ex-spouse’s benefits as long as they were married for at least 10 years. The amount you receive is equal to 50% of your ex’s benefits. If you qualify for your own benefits, you either receive 100% of your benefit amount or 50% of your ex’s, whichever is higher. The best part? Your ex never has to know you’re collecting spousal benefits. Social Security doesn’t notify them and you’re not required to reach out.
If your ex passes away, you receive benefits as a widow, which means you get 100% of your ex’s payout. There is one caveat to this rule, however. You won’t qualify for spousal benefits if you remarry. Your ex can, but you can’t. Although, if you happen to remarry and your second marriage ends in divorce or your spouse dies, you’d once again be eligible for your first spouse’s benefits.
Widows and divorcées who were married for at least a decade are eligible for survivor benefits when a spouse dies. Just keep in mind that you won’t qualify for survivor benefits if you remarry before age 60.
As with regular Social Security payouts, you receive reduced benefits if you claim them before you reach full retirement age. But unlike regular payouts, you don’t have to wait until you’re 70 to get the highest amount.
The chart below shows what percentage of survivor benefits you’d get based on your situation:
| Widow Type | Benefit Amount Before Retirement Age | Benefit Amount at Full Retirement Age |
|---|---|---|
| Widow | 71.5% to 99% (starting at age 60) | 100% |
| Disabled Widow | 71.5% (starting at age 50) | 100% |
| Widow With Child Under Age 16 | 75% (at any age) | 100% |
Navigating the complex world of Social Security can be like solving a puzzle with many pieces. Going at it alone may not be the best approach if you want to experience clarity and confidence. That’s why it can be helpful to partner with a financial professional.
At TFC Financial Management, we’re here to guide you through your options and selecting a claiming strategy tailored to your specific circumstances. We guide you through the ins and outs of Social Security and support you along your entire financial journey. If you’re looking for a financial planner who understands your unique needs and empowers you to make informed decisions, schedule a no-obligation introductory meeting with us online or reach out to me at (617) 210-6726 or email mmeehan@tfcfinancial.com. Let’s work together to create your ideal financial future.
Michael Meehan is Managing Director-Marketing and Senior Client Advisor at TFC Financial Management, an independent, fee-only Registered Investment Advisory firm that provides financial planning, personal financial advisory services, and asset management for individuals, couples, and families. They help clients build and preserve wealth for the long term and, as fiduciaries, always put their clients’ interests first. Part of the TFC team since 2020, Michael participates in the firm’s financial planning and investment review process and provides financial planning and investment advisory services for a select number of clients. He takes pride in helping clients navigate complex financial landscapes, and relieving their worry and angst.
Prior to joining TFC Financial Management, Michael gained extensive experience in the financial planning world as Senior Director and Wealth Manager for BNY Mellon Wealth Management.
Michael holds a Master in Personal Financial Planning from Bentley College, as well as a Bachelor of Science in Accountancy. Michael is a CERTIFIED FINANCIAL PLANNER™ practitioner, a CPA, and holds the Personal Financial Specialist (PFS™) designation. Michael coached youth hockey for many years and is a former Board member and Treasurer of the Natick Comets Hockey Club organization. He formerly served on the Board of Trustees for the Village School in Milton, MA. Outside of work, he enjoys spending time with his wife and children, playing hockey, spending time at the beach, kayaking, fishing, hiking, and helping take care of his family’s horses. To learn more about Michael, connect with him on LinkedIn.
