TITLE

When Should Women Claim Social Security Benefits?

AUTHOR(S)
Munnell, Alicia; Soto, Mauricio
PUB. DATE
June 2007
SOURCE
Journal of Financial Planning;Jun2007, Vol. 20 Issue 6, p58
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
• This paper summarizes the incentives facing older women when deciding when to claim their Social Security benefits, Nearly 60 percent of women opt for actuarially reduced benefits at age 62--a greater percentage than men. Yet women are expected to live longer than men. Longer life expectancy would generally suggest delaying Social Security benefits. But the analysis shows that single women and married women face very different choices. • Married women are entitled to three types of benefits: (1) benefits based on their own earning records, (2) spouse's benefits based on their husband's earning records, or (3) survivor's benefit equal to 100 percent of their husband's benefits. These benefits are reduced if claimed earlier than the full retirement age. • From the authors' study, two key points emerge. First, in the case of survivors' benefits, the husband usually can maximize the benefits of the couple or his surviving wife by delaying his claim. • Second, the wife is usually better off claiming her own Social Security benefits as early as possible, though this can change depending what percent age her own benefits are of her husband's benefits. • For most married women, the Social Security benefit structure actually encourages them to grab their- benefits as soon as possible. While this may maximize the wife's Social Security "wealth," it also encourages them to withdraw from the labor force, creating a loss of earnings and 401 (k) savings, and extending the period over which they need to support themselves in retirement.
ACCESSION #
25309670

 

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