Podcast Episode 341: Social Security Planning Decisions for Women

As women approach retirement age, it’s crucial to understand the nuances of Social Security and its impact on long-term financial health. On our latest podcast featuring Heather Atkins, CFP®, CRPC®, we will shed some light on this topic, focusing on why women tend to claim Social Security benefits at 62 and the implications of such decisions.

There’s a surprising trend: one-fourth of women start collecting Social Security at the earliest possible age of 62. While this may seem advantageous for immediate financial relief, it poses significant drawbacks in the long run. Women generally live longer than men, meaning early claimers could face reduced lifetime benefits. The reason for this might be due to fears about the program’s solvency or because they have lower average savings than men, which underscores the importance of informed financial planning.

Understanding the Social Security earnings test is another critical component of retirement planning because it impacts those under full retirement age. If you work while receiving benefits and your earnings exceed a certain threshold (currently just over $21,000 annually), you could see a temporary reduction in benefits. However, it’s not a permanent loss; the benefits are recalculated and increased once you reach full retirement age.

Deciding when to claim Social Security benefits is a personal decision that should be based on individual financial situations. For some, delaying benefits until age 70 to receive a higher monthly payout makes sense, but it’s not universally the best choice. The key is to weigh your expected lifespan, current income needs, and other financial resources.

To assist women in making these crucial decisions, we offer everyone the opportunity to get the Women’s Guide to Financial Empowerment. This guide aims to empower women with the knowledge needed to navigate Social Security and retirement planning confidently.

In conclusion, Social Security is a complex system with many factors to consider. Women, in particular, must be vigilant in their approach to claiming benefits, taking into account life expectancy, financial needs, and the broader implications of early or delayed claiming. By seeking professional advice and getting as much information as possible, women can secure a financially sound future and enjoy their golden years with peace of mind.

Here’s some of what we discuss in this episode:

• Why are so many women starting their Social Security at the earliest age?

• What’s wrong with taking the benefit at 62?

• How does the earnings test work and how does it apply to your benefits?

• An example of when waiting until 70 might be the wrong decision.