Published by Taylor Financial Group for women
When I was a child, my mother always told me that “the early bird gets the worm,” to which I cheekily responded “but the second mouse gets the cheese.” However, my mother was right that in most cases, it does pay to be early. For example, when trying to get into restaurants, I always make my reservation in advance rather than calling the day of. However, when it comes to maximizing your Social Security benefits, it will literally cost you to take those benefits early.
Why is it so important that women maximize their Social Security benefits?
As women, we face two unique challenges that hinder our retirement. First, we must remember that on average, women receive less lifetime earnings and income from retirement accounts like 401(k)s and company pension plans than men do. Second, we women tend to outlive our male spouses, and must often rely on our own financial resources. Therefore, it is imperative that women maximize their Social Security benefits, especially since women expect Social Security to pay for more than half of their expenses in retirement, according to a study by Nationwide Retirement Institute.
So, how can you maximize my Social Security benefits? Unfortunately, eight in ten retired women collecting Social Security benefits took their benefits early rather than waiting until they were 70 years young! This is so unfortunate because by taking the benefits early, on average you will receive less money in the long term than someone who waited to maximize their benefits. For example, the average woman who started taking Social Security early receives just $1,084 in monthly benefits. However, the average woman who waits until she is 70 years young and maximizes her benefits can expect $1,527 in monthly benefits. By waiting to maximize your benefits, you can collect an extra $5000 per year, not counting inflation increases.
The bottom line is that women face enough stress and difficulty budgeting for retirement. So, ensuring that you maximize your monthly benefits can go a long way in securing your financial future.
As always, if you’re feeling overwhelmed or have questions about your finances, give us a call today. We can help you create a plan for your future and your retirement.
Sources:
ThinkAdvisor, Women Failing to Max Out Social Security Benefits in Retirement, October 4, 2016
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