What Every Woman Needs To Know About Her Retirement

Take just a minute out of your busy day to think about these three facts:

  1. Women generally live, on average, 4.5 years longer than men.
  2. Women are 2.5 years younger than their husbands, on average.
  3. Even though the median household incomes of American workers aged 65 and older has increased, women have been found to receive 26 percent less income than men. 

These numbers point to the stark but fairly certain reality that if you are female, then at some point you may be in charge of making all your own financial decisions if you aren’t already. Baby boomer women who are approaching retirement today are the first generation to do so under the new retirement reality: 401(k)s, reduced personal savings, and disappearing pensions plans. Here is a reference guide to the 7 things every woman needs to know to plan accordingly.

  1. If you are married, you are probably entitled to spousal benefits: According to the Social Security Administration, you may be able to get spousal benefits even if you have never worked or paid into Social Security. If you are at least 62 years of age and your spouse is receiving retirement or disability benefits, then you may receive spousal benefits and qualify for Medicare at age 65. To learn more about your benefits, set up your account at My Social Security.
  2. You may be able in increase your spousal benefits if you plan correctly: While you may qualify for Social Security benefits at the age of 62, waiting to file could increase your benefit by as much as 32 percent. This makes planning essential because when one spouse passes away, the surviving spouse is entitled to the higher of the two Social Security checks. Waiting to file can increase the size of your benefit, which equals more money for you! Working with a qualified advisor may be able to help you increase your income.
  3. You may be entitled to receive benefits from your ex-spouse even if they’ve remarried: You are eligible for divorce benefits if all of the following are true: 1) You are currently unmarried, 2) you are age 62 or older, 3) your ex-spouse is entitled to Social Security benefits, and 4) your own benefit is less than the divorce benefit of your ex-spouses. Divorce benefits are equal to one-half of the ex-spouses full retirement amount. And here’s something else to consider: you can still claim this benefit even if your ex doesn’t file, and claiming for yourself will not reduce his or her benefit amount.
  4. Pensions don’t always provide for a surviving spouse: For those lucky enough to get them, pensions typically give retirees the option of electing a smaller monthly paycheck in exchange for spousal benefits. That means if the individual holding the pension passes away, the spouse will still receive a portion of the paycheck. This only happens, however, if the individual checks the right box. In some cases, it might be advantageous to receive the higher paycheck and invest in a type of annuity contract that can provide for the surviving spouse.
  5. The money in an IRA only provides income to one individual, not a spouse. While an IRA may an effective way to save for retirement, it only provides income for one person. For married people who are retiring without the benefit of pensions, a more reliable way to secure income for both spouses might be an annuity. An index annuity with a lifetime income rider, for example, offers both spouses joint coverage, which means they can both receive guaranteed income for life. Go here to ask your annuity questions. To test what you think you know about annuities, check out this list of facts.
  6. If you are working while receiving Social Security, you may be paying a hefty penalty: Working during retirement can be a great way to supplement your income and keep you active, however, you should be aware of the penalty. If you are not yet at full retirement age and you’re earning more than $17,040, then the Social Security Administration may deduct $1 from your benefit payments for every $2 you earn above that annual limit. Once you reach full retirement age, the penalty no longer applies. To find out when you will reach full retirement age, use this handy retirement age calculator.
  7. Not all immediate annuities pay out income to the spouse: Immediate annuities are designed to pay out a regular paycheck, but they also annuitize the stream of money. That means the money as a lump sum is now being held by the insurance company that holds your contract, and the only way to get it back is through regular, periodic income payments. This can be great if you need income, however, unless you elect the correction allocation option, the annuity will only pay out for a single individual, and not for a spouse. To have your annuity tested, fill out this simple questionnaire.
  8. BONUS: Help the men you love to live longer by doing these four things: 1) Eat a Mediterranean diet, 2) Enjoy rosemary, 3) Get plenty of exercise, 4) Lower stress. You can read all the juicy details here.

Please pass this list on to the women in your life and share the knowledge. If you have any questions, feel free to reach out to one of our advisors. We’re always happy to answer any questions, no strings attached.

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