The importance of Social Security for women

Social Security is one of the most valuable retirement assets you have. Once elected, it's a lifetime benefit that typically adjusts for inflation each year, and (unlike portfolio investments) is unaffected by market movements. This means it provides a guaranteed source of income in retirement that can help ensure you meet your basic needs, while addressing two key retirement risks — inflation and living longer than you expect.

Key considerations for women 

Because it can be such a critical element of a woman's retirement assets, it's important to understand a few aspects about how Social Security benefits work.

When to take Social Security 

On average, women live around 5 years longer than men¹, so they rely on Social Security for a longer period of time. That's why women should think carefully about when to take Social Security. Taking it earlier reduces your benefit while delaying it (up to age 70) could mean higher lifetime benefits.

Work history

Your Social Security benefit is generally calculated using the earnings from your 35 highest paid years. If you have zero or very low earnings in that calculation, it can reduce your benefit. Many women leave or reduce work to provide care for their families, but if you can stay in the workforce to build your earnings history, you may be able to increase your Social Security benefit.

Spousal benefits

Women who are married have access to two kinds of benefits: spousal benefits and survivor benefits. 

A spousal benefit may be available to a lower-benefit spouse when they reach age 62 (with a minimum one year of marriage to qualify). To be eligible, one spouse’s full retirement age benefit must be less than half of the other spouse’s full retirement age benefit. The age at which the higher benefit spouse claims their benefit doesn’t affect the amount the lower-benefit spouse receives, but if the lower-benefit spouse claims before their full retirement age, both their own retirement benefit and spousal benefit are reduced.

With a survivor benefit, the surviving spouse receives up to 100% of their deceased spouse’s benefit or their own, whichever is higher. Unlike spousal benefits, if your spouse claims early, your survivor benefit is reduced. Consequently, deferring Social Security benefits is one way a higher earning spouse can provide for (and financially protect) a partner who outlives them. A surviving spouse also has the option to claim their own benefit and switch to their survivor benefit later (or vice versa) to maximize the higher benefit amount.

Divorce and remarriage

Divorced spouses may be entitled to spousal and survivor benefits if they were married to their ex-spouse for at least 10 years and remain unmarried. 

Remarrying may impact your eligibility for these benefits: 

• If you’re divorced and remarry, you’ll no longer be entitled to spousal benefits from your former spouse as long as you remain married.
• If you’re widowed, remarrying before age 60 — or before age 50 if you’re considered a disabled widow or widower — will cause you to lose eligibility for survivor benefits from your late spouse as long as you remain married.

How we can help

At Edward Jones, we understand the special circumstances that are unique to women in general – and to you in particular. Ask your Edward Jones financial advisor for more information about retirement income strategies that consider your circumstances.