What Every Woman Needs to Know About Social Security Benefits

Just the other day I was meeting with one of my female clients and she asked me so many great questions about Social Security benefits. She asked if she was eligible for certain benefits because she was a stay-at-home mom her whole life.

I immediately thought of my Social Security Teacher audience and thought, “This is such a great, important topic . . . let me write about it.”

Clearly, I am the authority on what women need to know. I live with my wife, Michelle; daughter, Juliette; and female dog, Luna. One thing I am certain of: men are truly from Mars and women are from Venus. 😊

This article is not solely based for the amazing stay-at-home moms out there, it is also for the equally-as-awesome women with careers, the homemakers, or even for you Peggy Bundy types, LOL!

Hence the article name: What Every Woman Needs to Know About Social Security Benefits.

What Every Career Woman Needs to Know

This one should be pretty straightforward for all single or married women, especially since I know you are all avid readers of my blog and read every article.

Social Security credits are based on the amount of your earnings. According to SSA.gov, they are the “building blocks” of the Social Security system.

How Do You Earn Credits?

Essentially, if you have worked and paid taxes into Social Security for at least 10 years and earned at least 40 credits, you will probably be eligible to receive benefits.

You qualify for credits when you have a job, have earned income, and pay Social Security taxes. In 2017, you will receive one credit for each $1,300 of earnings. For a maximum of four credits per year, in 2016 you need to have $5,200 in earned income.

Important: If you change your name, make sure you report the change to the Social Security Administration. You will need to fill out an Application for a Social Security Card (Form SS-5). You can get the form by visiting any Social Security Administration office, or by calling 800-772-1213.

You are eligible to start collecting approximately 70% of your benefits as early as age 62. In order to collect your full benefit you must wait until your full retirement age (FRA).

If you ever become disabled, you may be eligible to receive disability benefits.

What Every Stay-at-Home Mom/Homemaker Needs to Know

I hear this question almost once per day: “Joe, I was a homemaker or stay-at-home mom. Am I entitled to receive Social Security benefits?”

The answer is: Yes!

If you are a stay-at-home mom, a homemaker, or yes, even the Peggy Bundy type, and you are married, you will qualify for spousal benefits.

The benefits you will receive is based on your spouse’s earnings record when he or she is alive. You are entitled to the larger amount of the benefits based on your earnings record, or if eligible, spousal benefits, which is up to 50% of the spouse’s primary insurance amount (full benefits).

For example, if your spouse is entitled to start collecting $2,000 per month at their full retirement age, you would be entitled to receive $1,000 per month at your full retirement age.

What Every Woman Needs to Know About Dual Entitlement

The spouse is entitled to the larger amount of the benefits based on their earnings record, or, if eligible, spousal benefits, which is up to 50% of the spouse’s primary insurance amount.

The important thing to note is that you do not receive both benefits. Social Security will pay your benefits first. Then, if your spousal benefit is higher than your benefit, you will receive the higher spousal benefit.

For example, let’s say your benefit at full retirement age is $1,000 per month and your spouse’s benefit at full retirement age is $1,850. You will receive your $1,000 per month benefit because $1,000 per month is higher than 50% of your spouse’s ($1,850 x 50% = $925).

Let’s look at the same example and change things a little. Let’s assume your benefit at full retirement age was $800 per month. Then in this example you would collect $925 at your full retirement age because 50% of your spouse’s $1,850 benefit ($925) is higher than your $800 benefit at full retirement age.

What Every Widow Needs to Know

According to SSA.gov, a widow is probably eligible to receive a benefit between 71% (starting at age 60) and 100% (at full retirement age) of what their spouse was receiving before they died.

I want to point out a major difference between widow benefits and your benefits or spousal benefits: you can start collecting widow benefits as early as age 60, while to start collecting other benefits you need to wait until age 62.

Keep in mind, however, that whenever you start collecting benefits before your full retirement age it will be at a reduced rate.

Similar to spousal benefits, you are entitled to the larger amount of the benefits based on your earnings record or your spouse’s benefits they were receiving before they died.

For more information and the many rules and scenarios please read my article, How to Navigate the Maze of Social Security Survivors Benefits.

What Every Married Woman Needs to Know

Often there is this misconception that there is a marriage penalty and couple’s benefits could potentially be reduced or limited. I have great news: that’s not true! Each will receive their own Social Security benefit.

What Every Divorced Woman Needs to Know

You can still qualify for spousal benefits. If you were married to your ex-spouse for at least 10 years, you may be eligible to receive spousal benefits.

You may also qualify for widow benefits if your ex-spouse is deceased and your marriage lasted at least 10 years. You will get the higher of your earnings record benefits or your ex-spouse’s widow benefits, not both.

What Every Caregiving Woman Needs to Know

According to SSA.gov, if you are caring for an elderly or disabled relative and you help manage their monthly Social Security benefits or SSI benefits, you may be eligible to be a representative payee.

Essentially, when people you are caring for need help managing their money, Social Security will pay you their benefits to use on their behalf.

For more information, please visit SSA.gov/payee.

Sources:

• https://www.ssa.gov/pubs/EN-05-10044.pdf
• https://www.ssa.gov/pubs/EN-05-10127.pdf