According to the official Social Security website, 57% of beneficiaries 62 years and older are women making it important to understand what social security changes mean to women of all ages. Whether you work for a company or run your own business, you need a plan for retirement and Social Security may not be available by the time you’re eligible.
Let’s review recent social security changes that impact women.
Spousal Benefits: If you’re divorced, consider the impact of Social Security Ex-Spouse Benefits to your financial plan. If you have more than one ex-spouse, it can get a bit more complicated in terms of whose benefits you qualify for and which make the most sense in taking; you can’t take all of them.
At the end of 2015, if you were married or divorced and 62 years or older, you’re still able to claim spousal-only benefits at 66 years old. This applies to divorced spouses who were married at least 10 years and are currently single and eligible for benefits on their ex-spouse’s earnings record. You must have been divorced for at least two years. If you were younger than 62 years old at the end of 2015, you will be paid the higher of your benefit or your ex-spouse’s benefit, not both.
Filing Early for Social Security Benefits: There are times when it makes sense to file early for social security but for most of us, it’s worth waiting until we’re between 65 and 67 years old. If you can earn income to cover basic expenses until you’re eligible for benefits, I often recommend doing that. Otherwise you could be receiving less in benefits.
File and Suspend Benefits until 70 Years Old: If you’re at retirement age or older, you currently have the option to claim Social Security benefits and suspend them until you’re 70 years old. Benefits grow at 8% per year up to age 70 meaning you could receive more than your earned benefit. Family members eligible to receive benefits on your worker’s record can still receive their benefits while the worker’s account is suspended but that’s about to change.
After April 30, 2016, you will no longer be able to file and suspend unless you’re already 66 years or older. New requests to file and suspend after May 1, 2016 are subject to new rules including not allowing family members to receive benefits while the worker’s benefit is suspended. If you have family members who need the benefit, you may be forced to take yours too. That can make an impact on retirement planning.
While we can estimate Social Security benefits, the law will always be changing. The reality is that for some of us, Social Security may not be available by the time we’re eligible. That’s where a financial professional can help you plan for retirement.
Call Heritage Financial Strategies at 480-397-1184 today to get started!