 | | Karen Callahan, 67, of Marlborough, Mass., plans to put off retirement for a few more years.David Degner for The New York Times |
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"I have put the money in, and I am going for the max." |
— Karen Callahan, the owner of a web design business, on her Social Security income |
As a single woman with no children, Karen Callahan is putting together the financial pieces that will protect her for a potentially long life on her own. A large piece of her puzzle: getting as much Social Security income as she can. |
Ms. Callahan, 67, of Marlborough, Mass., is holding off on claiming her benefits until she turns 70, when she will be eligible for $3,100 a month. If she claimed today, she said, her benefit would be permanently reduced to about $2,500. |
The income from a web design business she owns will cover her expenses until 70, including a $375 monthly condo fee on her townhouse. In excellent health and able to bench press 120 pounds, Ms. Callahan expects to live long enough to get more in lifetime benefits by waiting than by claiming less for a longer time. |
"Hell's bells — I have put the money in, and I am going for the max," she said. |
For many older single women, as well as for divorced women and widows, getting the most out of Social Security is crucial, experts say. Women tend to live longer than men, and they depend more on Social Security as a primary source of retirement income. Also, their benefits, on average, are smaller, in part because of lost earnings or part-time work during years caring for children and older relatives. |
Even so, many women leave considerable amounts of this guaranteed source of inflation-adjusted money on the table, said Marcia Mantell, a retirement consultant in Plymouth, Mass., and author of "What's the Deal With Social Security for Women?" |
"This safety net is incredibly important in old age," she said. "Yet most women don't understand how to fully maximize this benefit." |
Younger women with years of work ahead of them can start to maximize benefits, Ms. Mantell said, by seeking jobs with more money and asking for raises, which "yields a higher benefit payout tomorrow." |
To start cutting through the morass, it is helpful to know the basics. A key concept is known as full retirement age — when one is entitled to a full benefit based on one's earnings. A person born between 1943 and 1954 can claim a full retirement benefit at 66. The full retirement age gradually increases to 67 for those born in 1960 or later. |
The earliest a person can claim is 62, but the benefit will be permanently reduced by a certain percentage for each month the beneficiary claims before reaching full retirement age. For instance, a woman with a full retirement age of 67 will receive 70 percent of her full benefit by claiming at 62. |
For each year a beneficiary postpones claiming between the full retirement age and 70, the benefit rises 8 percent; this is known as a delayed retirement credit. |
For couples, including married same-sex couples, a lower-earning spouse can claim a "spousal" benefit on her partner's work record at 62, but only if the other partner has started collecting. At full retirement age, the lower earner can collect a spousal benefit that is 50 percent of the higher earner's full retirement benefit. |
A prospective beneficiary can go online to check her Social Security Statement, which shows the record of her annual earnings and provides estimates, based on that record, of how much she will receive at her full retirement age, or by claiming at 62 or waiting until 70. |
Whatever strategy a woman uses, financial planners say Social Security should be just one part of a retirement income stream. When Ms. Callahan turns 70, she said, she expects to pay for half of her expenses, including travel, with three things: profits from the sale of her business, assets in her individual retirement account and possibly money from part-time work. |
Social Security will cover the other half. Waiting until 70 to collect, she said, will give her a much better chance "to live the lifestyle I want to live." |
Here are three articles from The Times you may have missed. |
 | | In 1961, the Yankees rejected a 10-year-old Gwen Goldman to be a bat girl.Sarah Stier/Getty Images |
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- "A young lady such as yourself would feel out of place in a dugout." Rejected at age 10 because she was a girl, Gwen Goldman finally got her major league moment as a bat girl — six decades later. [Read the story]
- "Only a woman could be punished, not a man." An unmarried Catholic schoolteacher got pregnant; then she was fired. A lawsuit that she filed in New Jersey is testing the First Amendment limits of religious freedom. [Read the story]
- "Long and tall and that's all." Meet the first woman officially drafted by the N.B.A.: Lusia Harris led her team to three national championships, scored the first basket in women's Olympic history and was an official draft pick in 1977. [Watch the Op-Doc]
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In Her Words is edited by Francesca Donner. Our art director is Catherine Gilmore-Barnes, and our photo editor is Judith Levitt. |
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