Retirement Planning for Women: Why You Should Start Now, Even If You Feel Behind
For many women, Social Security is more than just a government program—it’s a critical piece of their financial future. Whether you’re nearing retirement or just starting to think about it, understanding how Social Security works can help you make informed decisions that maximize your benefits and provide long-term financial security.
The truth is, women face unique challenges when it comes to retirement planning. Longer life expectancies, career breaks for caregiving, and the gender pay gap all impact how much you’ll receive in benefits. But with the right strategy, you can take control of your retirement and ensure you get the most out of Social Security.
Why Social Security Is So Important for Women
Because women often outlive men, their retirement savings need to last longer. Social Security benefits play a key role in providing steady income throughout those additional years.
Additionally, many women take time off work to care for children or aging parents, which can lead to fewer years of earnings and lower Social Security benefits. Since Social Security is based on your highest 35 years of earnings, missing work years can impact your payout.
However, the good news is that with careful planning, you can take steps to maximize what you receive.
How to Maximize Your Social Security Benefits
1. Understand Your Full Retirement Age (FRA)
Your Full Retirement Age (FRA) is when you’re eligible to receive 100% of your Social Security benefits. For most women retiring today, FRA is between 66 and 67, depending on your birth year.
If you claim benefits before your FRA (as early as age 62), your monthly check will be permanently reduced. However, if you delay claiming benefits until age 70, your payout increases by about 8% per year—a powerful way to boost your income in retirement.
2. Leverage Spousal and Survivor Benefits
Even if you didn’t work enough to qualify for Social Security on your own, you may still be eligible for benefits based on your spouse’s or ex-spouse’s earnings history.
Spousal Benefits: If you’re married, you can receive up to 50% of your spouse’s benefit at their FRA.
Divorced Women: If you were married for at least 10 years, you can claim spousal benefits based on your ex-spouse’s earnings—even if they remarry.
Survivor Benefits: If your spouse passes away, you may be eligible for 100% of their benefit, giving you additional financial security.
Understanding these options can help you maximize your Social Security income, even if your own earnings record isn’t as strong.
3. Plan for Taxes on Your Benefits
Many retirees are surprised to learn that Social Security benefits can be taxed. If your combined income (including wages, withdrawals from retirement accounts, and other sources) is above a certain threshold, you may have to pay taxes on up to 85% of your benefits.
Strategically managing your retirement income—such as withdrawing from tax-free accounts like Roth IRAs—can help minimize taxes and keep more of your Social Security check in your pocket.
4. Consider the Impact of Working in Retirement
If you plan to work while collecting Social Security before your FRA, be aware of the earnings limit. In 2024, if you earn more than $22,320 per year, your benefits may be temporarily reduced. Once you reach FRA, you can earn as much as you want without impacting your Social Security payments.
5. Make Smart Decisions About Your Claiming Strategy
The biggest mistake many women make is claiming Social Security too early without considering the long-term impact. Taking benefits at 62 instead of 70 can mean a 30% reduction in monthly income—which can add up to tens of thousands of dollars lost over your lifetime.
Instead of rushing to claim, take time to explore your options and create a strategy that aligns with your long-term financial goals.
Get Guidance for Your Social Security Plan
Social Security is one of the most important financial decisions you’ll make in retirement, and the choices you make today will impact you for decades to come. A strategic approach can help you maximize your benefits, minimize taxes, and ensure financial security throughout your retirement years.
If you’re unsure about when to claim or how to integrate Social Security into your overall retirement plan, let’s talk. I specialize in helping women create customized strategies to optimize their retirement income and build a secure financial future.
Schedule a call today, and let’s ensure you’re making the smartest Social Security decisions for your future.
Disclosures
Money Matters Wealth Solutions is a dba of The Wealth Boutique, a registered investment advisor with the Securities and Exchange Commission. The Wealth Boutique and each of the DBAs are not under common ownership but owned and operated separately. All financial planning and advisory services are provided by The Wealth Boutique. All investments involve risk and unless otherwise stated, are not guaranteed. Be sure to consult with a tax professional before implementing any investment strategy.| Full Disclosure | CRS
This content was generated with AI assistance. While we strive for accuracy, AI may not capture all current laws and market conditions. This information is for informational purposes only and should not be considered personalized financial advice. Always consult a licensed financial advisor for decisions tailored to your unique situation and goals. AI is used to enhance insights, not replace professional guidance.