{"id":3803,"date":"2020-04-07T06:00:00","date_gmt":"2020-04-07T13:00:00","guid":{"rendered":"http:\/\/springwaterwealth.com\/?p=3803"},"modified":"2020-08-09T22:11:56","modified_gmt":"2020-08-10T05:11:56","slug":"social-security-for-women-what-every-woman-should-know","status":"publish","type":"post","link":"https:\/\/springwaterwealth.com\/social-security-for-women-what-every-woman-should-know\/","title":{"rendered":"Social Security for Women: What Every Woman Should Know"},"content":{"rendered":"

Women have made incredible strides in their effort to achieve equal treatment with men.\u00a0 In the United States, women gained the right to vote with the passage of the 19th<\/sup> Amendment to the US Constitution which was ratified in 1920.\u00a0 The gap in pay with men has shrunk significantly, because of the Equal Pay Act of 1963.\u00a0 The Pregnancy Discrimination Act of 1978 made discrimination based on pregnancy illegal.\u00a0 The Family and Medical Leave Act of 1993 gave women the right to take a leave from a company to care for a newborn or adopted child.<\/p>\n

Yet, with all of those legal victories, women are still at an economic disadvantage to men.\u00a0 Women still earn less than men and this is still true even when they perform the same job duties as their male counterparts.\u00a0 They live longer than men, 5 years on average, and this means they need more resources than men will in retirement<\/strong><\/a>.\u00a0 They often spend many years of their lives caring for children, parents, other family members (e.g. aunts and uncles) and their spouses.\u00a0 As a result, they end up with smaller pensions, retirement accounts, savings and investments than men.<\/p>\n

There is, however, a significant government benefit that has saved millions of women from poverty:\u00a0 Social Security.\u00a0 Let\u2019s review this incredible social program and what it can mean for you as you plan for your retirement<\/strong><\/a>.<\/p>\n

The Social Security Act was passed in 1935 during the Roosevelt administration in the aftermath of the Great Depression.\u00a0 Among the goals of the legislation was to provide financial security for Americans after they stopped working and could no longer earn an income.\u00a0 Prior to the creation of Social Security, people worked as long as they could and if they could not work and did not have savings, they were left destitute and reliant upon charity.<\/p>\n

How do I qualify for Social Security?<\/h2>\n

If you are working, your employer is required to make payments to Social Security under the Federal Insurance Contributions Act (FICA).\u00a0 A portion of those payments are considered employee contributions (yours) and a portion are considered employer contributions (your employer).<\/p>\n

You earn a credit for every quarter that you work and contribute to Social Security.\u00a0 You can earn up to four credits in a year.\u00a0 To become eligible for benefits, you must accumulate 40 credits which is effectively 10 years of working.\u00a0 The Social Security Administration (SSA) will track your earnings to determine your eligibility for retirement, disability, spousal and dependent benefits.<\/p>\n

Each year your employer is required to send a Form W-2 to Social Security which indicates your earnings and your contributions to Social Security.\u00a0 It is important that this information is accurate.\u00a0 So, do check it and have your employer correct it, if you find inaccuracies.\u00a0 Social Security is a key financial resource for women in retirement.<\/p>\n

How are my retirement benefits through Social Security calculated?<\/h2>\n

Your retirement benefits are based on your lifetime earnings.\u00a0 The SSA adjusts your earnings (i.e. indexes them) for changes in average wages since the year you received them.\u00a0 Then the SSA calculates your average indexed monthly earnings (AIME) for the 35 years in which your earnings were the highest.\u00a0 So, if you worked 45 years, the SSA will take the 35 years with the highest wages.\u00a0 The SSA applies a formula to these earnings to arrive at your basic benefit or \u201cprimary insurance amount\u201d (PIA).<\/p>\n

When can I take my Social Security retirement benefits?<\/h2>\n

You can take your retirement benefits as early as age 62.\u00a0 However, your full retirement age (FRA) benefit is the age at which your benefits are unreduced.\u00a0 That age depends on when you were born.\u00a0 You can determine your FRA by looking on the SSA website<\/a><\/strong>.\u00a0 If you take benefits before your FRA, they will be reduced.\u00a0 Alternatively, if you wait to take them, they will be increased.\u00a0 You can wait up to age 70 before taking your retirement benefits.<\/p>\n

Want to learn more about retirement planning? Contact our team at Springwater Wealth today to learn how we can help you develop a plan for your financial future.<\/a><\/span><\/strong><\/h2>\n

 <\/p>\n

Are my retirement benefits through Social Security adjusted for inflation?<\/h2>\n

Yes.\u00a0 Your retirement benefits will be adjusted for any increase in the cost of living as measured by the Consumer Price Index for Urban Wage Earners and Clerical Workers.\u00a0 The SSA provides information about cost-of-living adjustment on its website<\/strong>.<\/a><\/p>\n

If you have ever spoken with anyone receiving Social Security retirement benefits about the annual adjustment for inflation, you have probably been told that the increase rarely seems to be enough to keep with the rising cost of living in retirement.\u00a0 One of the reasons for this is that retirees often spend more on health care than those who are still working.\u00a0 The inflation rate associated with health care expenditures has exceeded the overall rate of inflation for many years running.<\/p>\n

When do my retirement benefits end?<\/h2>\n

They don\u2019t.\u00a0 Your Social Security benefits will be paid to you as long as you are alive.\u00a0 This is rather extraordinary.\u00a0 Your retirement benefits are guaranteed by the federal government, indexed for inflation every year and paid for life.\u00a0 You are not likely to have any other income source like it.<\/p>\n

How much of my income will be replaced by my Social Security retirement benefits?<\/h2>\n

Social Security retirement benefits typically replace about 40% of a worker\u2019s pre-retirement income.\u00a0 The benefits are structured to replace relatively more income for lower wage workers and less for higher earning workers.<\/p>\n

Most women expect Social Security to cover their expenses in retirement.\u00a0 This is not realistic. So, it is important to save while you are working and enter retirement with other resources in addition to Social Security benefits.<\/p>\n

Can I receive benefits based on my ex-spouse\u2019s work history?<\/h2>\n

Yes. \u00a0However, you must meet all of the following requirements.\u00a0 You must have been married to your ex-spouse for at least 10 years.\u00a0 Your spouse must be alive.\u00a0 You must not be re-married.\u00a0 You must be over the age of 62.\u00a0 The benefit to which you are entitled based on your own earnings history must be less than the benefit you would receive based on your ex-spouse\u2019s work history (otherwise, you would just take your own benefit). \u00a0Also, if your ex-spouse has not applied for benefits, but qualifies for them and is 62 or older, you can receive benefits on his record as long as you have been divorced for at least two years. \u00a0If your ex-spouse is deceased, you are still eligible for benefits on his record.<\/p>\n

Note: The process of taking benefits on the greater of your record or your ex-spouse\u2019s record is called \u201cdeemed filing\u201d by the SSA, because when you file for one benefit you are required, or deemed to be filing for the other benefit.<\/p>\n

If I am a widow, do I receive Social Security retirement benefits?<\/h2>\n

Yes.\u00a0 If your spouse dies and you are over the age of 60, you can qualify for survivor\u2019s benefits.\u00a0 Your benefit amount will be based on your age and the benefit amount your deceased spouse was entitled to at the time of death.\u00a0 It will also be based on the benefit for which you are qualified based on your own earnings history.\u00a0 You will receive the greater of those benefits, but not both.<\/p>\n

Note: if your own retirement benefit through Social Security will be greater than your deceased spouse\u2019s, you can take your higher benefit as early as age 62.<\/p>\n

What if I was divorced, took benefits on my ex-spouse\u2019s record and then remarried?<\/h2>\n

In this case, you would forfeit the benefits you receive on your ex-spouse\u2019s record.\u00a0 You would qualify for benefits on your record.\u00a0 You would also qualify for benefits on your new spouse\u2019s record.<\/p>\n

What happens if I take my Social Security retirement benefits and keep working?<\/h2>\n

If you continue to work and take benefits before you reach your full retirement age (FRA), your Social Security benefits will be reduced $1 for every $2 you earn over the annual earnings limit<\/strong><\/a>.\u00a0 In the year you reach your Full Retirement Age, your benefits will be reduced by $1 for every $3 you earn over the limit the months before you reach your FRA.<\/p>\n

The good news is that the SSA will pay you a higher monthly benefit when you reach your FRA and your total lifetime benefits will not be reduced.<\/p>\n

How do I learn what my Social Security benefits are projected to be?<\/h2>\n

You should open a \u201cmy Social Security<\/strong><\/a>\u201d account at the SSA\u2019s website.\u00a0 There you can verify your earnings history and get an estimate<\/strong><\/a> of your future benefits.\u00a0 For information directed to women, download What Every Woman Should Know<\/strong><\/a>.<\/p>\n

Final Thoughts and Tips<\/h2>\n

Social Security benefits are an important resource for women in retirement.\u00a0 You should seek to build your earnings history with the SSA.\u00a0 To maximize your benefits, plan on taking your retirement benefits as late as possible, ideally at age 70. \u00a0If you are married and the marriage has not lasted 10 years and your income and earnings history is significantly less than your spouse\u2019s, think carefully about the financial implications of getting divorced<\/a><\/strong>.<\/p>\n

Social Security will not meet all of your needs in retirement.\u00a0 So, plan to save in other ways.\u00a0 Ideally, you will have several other retirement resources such as a pension, employer sponsored retirement plan (e.g. 401(k) or 403(b)), an IRA, a Roth IRA and other savings and investments.<\/p>\n

For further information about Social Security, please visit Social Security<\/a> <\/strong>online.<\/p>\n","protected":false},"excerpt":{"rendered":"

Women have made incredible strides in their effort to achieve equal treatment with men.\u00a0 In the United States, women gained the right to vote with the passage of the 19th Amendment to the US Constitution which was ratified in 1920.\u00a0 The gap in pay with men has shrunk significantly, because of the Equal Pay Act […]<\/p>\n","protected":false},"author":2,"featured_media":3812,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","_mi_skip_tracking":false,"footnotes":""},"categories":[3,6,152],"tags":[117,126,160],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/springwaterwealth.com\/wp-json\/wp\/v2\/posts\/3803"}],"collection":[{"href":"https:\/\/springwaterwealth.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/springwaterwealth.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/springwaterwealth.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/springwaterwealth.com\/wp-json\/wp\/v2\/comments?post=3803"}],"version-history":[{"count":0,"href":"https:\/\/springwaterwealth.com\/wp-json\/wp\/v2\/posts\/3803\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/springwaterwealth.com\/wp-json\/wp\/v2\/media\/3812"}],"wp:attachment":[{"href":"https:\/\/springwaterwealth.com\/wp-json\/wp\/v2\/media?parent=3803"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/springwaterwealth.com\/wp-json\/wp\/v2\/categories?post=3803"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/springwaterwealth.com\/wp-json\/wp\/v2\/tags?post=3803"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}