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5 important Social Security issues for women

Social Security can play an important role in overall retirement income. Unfortunately, many clients run the risk of oversimplifying Social Security and may not realize there are many strategies to getting the most out of their benefit. You can add significant value by educating clients, particularly women, on their specific and unique planning options.

Here are five of the most common Social Security issues that affect women:

1. Married women should plan for the possibility of solo years.

For couples nearing retirement, it is still common for the husband to have outearned the wife and likely that she will outlive him. If he claims benefits before full retirement age (FRA), he locks in a lower benefit amount that will not bump up at FRA. This also results in a reduced survivor benefit if he passes away before her. Women may not realize how their spouse鈥檚 decision could impact them in the long run, potentially resulting in a lower survivor payment than she could have had.

How you can help:

Talk with your married clients about the importance of planning for Social Security together.

2. Homemakers/caregivers can receive a benefit.

Women are more likely than men to be in and out of the workforce caring for children or aging parents, making it more likely they might not qualify on their own for Social Security. A woman may know in her mind that she hasn鈥檛 earned a benefit, but seeing a zero on her Social Security statement can be shocking. Despite that zero, a woman can receive a benefit in her own name on her husband鈥檚 (or ex-husband鈥檚) record. This is up to half of the spouse鈥檚 primary insurance amount (PIA), which is the amount he is eligible for at his full retirement age 鈥� not half of what he is actually collecting.

How you can help:

Make sure your female clients who don鈥檛 qualify for their own Social Security benefits understand they can receive benefits on their husband鈥檚 or ex-husband鈥檚 record.

3. Single divorced women can and should claim on their ex鈥檚 work record.

When divorced clients are estimating their retirement income, there can be a lot of confusion and apprehension around Social Security benefits. If a client gets divorced and doesn鈥檛 remarry, she should compare the benefits she鈥檇 receive filing on her own versus her benefits filing as a former spouse. She can claim a benefit on her ex-spouse鈥檚 record under certain circumstances, including:

• their marriage lasted at least 10 years
• her ex is eligible for benefits

Even knowing this, she may hesitate to ask for her ex鈥檚 permission to claim a benefit, particularly after a difficult divorce, thinking it will impact the ex鈥檚 benefit amount. Luckily, her claim on the ex-spouse鈥檚 record is completely confidential.

How you can help:

Reassure your divorced female clients their ex-spouses will not be notified or impacted by claiming Social Security benefits on their ex鈥檚 record. 

4. Widows should be prepared for a reduced benefit.

When a woman鈥檚 spouse dies, she will continue to receive the higher of her benefit or her late spouse鈥檚 benefit. However, she still loses one benefit and simultaneously moves from filing taxes jointly to being a single filer. Since a widow鈥檚 retirement income is not likely to go down much, this change can have a big impact, likely increasing the amount of her benefit that is subject to income tax. In addition, her Medicare Part B premium (based on income and deducted from her benefit check) may rise substantially.

How you can help:

Discussing how a change in marital status, such as becoming widowed, could affect income taxes and Medicare premiums with female clients can help them make plans to cover a potential income shortage.

5. Teachers and other public sector workers should investigate their benefit with care.

The Windfall Elimination Provision (WEP) and the Government Pension Office (GPO) can reduce or even eliminate Social Security benefits for public sector workers who receive a pension in place of Social Security. However, women affected by this may still believe they can claim as a spouse or surviving spouse, which is often not true.

Many people don鈥檛 know that public pensions can impact Social Security benefits. Determining the actual benefit can be complicated 鈥� the impact varies by state, and those who have also worked outside the public sector may find that Social Security statements do not reflect the WEP or GPO reduction. Couples in this situation who are counting on her getting a spousal benefit may be surprised. 

How you can help:

Explain to couples if she receives a pension in lieu of Social Security, she may not be able to claim a spousal benefit from Social Security and how that could leave her with less retirement income than expected.

Planning early puts time on her side

As you work with clients to look holistically at retirement planning, it is important to understand the most common intricacies of Social Security, including those that may be specific to women. 

Starting the Social Security conversation early can help reveal potential issues that can be managed while there鈥檚 time. Not only can you help your female clients get the most out of their benefit, but you鈥檒l get a clearer picture of the role Social Security will play. With that insight, you鈥檒l be able to more accurately identify any gap between projected expenses and retirement income. Introducing a fixed indexed annuity or registered index-linked annuity into a retirement plan can help cover the income gap.

Get the Social Security IQ toolkit to find out how to better connect with clients, discover new prospects and calculate outcomes for specific scenarios.

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This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

Not affiliated with or endorsed by the Social Security Administration or any governmental agency. This material contains educational information regarding the availability and details surrounding the Social Security program and is not intended to promote any product or service offered by 麻豆传媒. The information represents a general understanding of the Social Security Program and should not be considered personalized advice regarding Social Security, tax, or legal advice. Details of the Social Security Program are subject to change. A tax or legal advisor should be consulted prior to making any decision. Visit for additional details.

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