Grey is the New Green – Social Security and Women
“Grey is the New Green” is the newest saying catching hold in Maine and New England. It refers to the growing trend for older workers to continue working and earning income to age 70. This is in part due to a shortage of younger workers.
Social Security is Especially Important to WomenThere is a much more personal reason for women especially to consider working to age 70. More women rely on social security income than men, and they tend to live longer. By delaying taking social security benefits until age 70, you can greatly increase your monthly benefit, as well as the benefits you receive over your lifetime.
Your social security benefits are calculated by the 35 years where you had the highest earnings. Many women dropped out of the workforce altogether for children and family reasons. A report from Boston College’s Center for Retirement Research found that women are about three times more likely to have a zero-earnings year at some point during those 35 years. That is the case for nearly half of all women. Some chose to raise children, others went off to pursue a Ph.D. or other interests.
These gaps in income years skew benefits downwards. A recent article in the Wall Street Journal reported that “women who delay taking Social Security until 70 increase their monthly payment by 88% over their benefit at age 62.” If a woman had dropped out of work, returning to work (at a decent wage) to fill in the gap years allows her to grow her social security benefit.
For many reasons, it can be very tempting to retire at age 62. NBC news reported that “40.8 percent of the women who were newly awarded Social Security in 2014 were aged 62.” However, you really need to question the wisdom of the decision to collect social security at the young age of 62.
Know Where You Stand
We are believers that there are many positive reasons other than income and social security benefits to stay in or return to the workforce. Nonetheless, social security income is a major factor in basic comforts of living for a very large segment of the population. You will do well to understand what this means to your future by looking at your social security benefit “what if” scenarios. What if you retire at 62 versus 66 versus 70? If you have no pension and not a lot of savings, your social security income will be your lifeline to covering the basic expenses of living. Even though Social Security benefits are modest, the program lifts 14.5 million seniors out of poverty, and provides the majority of income for 61% of all seniors.
The Myth of Social Security Insolvency
There are myths that Social Security is insolvent. These alarmist views undermine faith in the system and cause some people to want to retire early. The Center on Budget and Policy Priorities states that “relatively modest changes will keep social security solvent for the next 75 years,” and that without any changes at all, the system is still solvent until 2034.
You can learn your earnings history and future benefits by going to www.ssa.gov/myaccount/. It is a good exercise for you to know exactly where you stand, especially if you had some low or no earning years.
Steve Raymond is the Director of Community Outreach at The Lincoln Home Senior Retirement Community, and the producer and host for the “Spotlight on Seniors” show.