Women and Social Security
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Women and Social Security
Since so many women must rely on Social Security benefits for their income later in life, it is important to understand how it works. Almost all workers pay into the Social Security system through payroll tax deductions or by paying self-employment taxes.
Things To Know
- Because so many women do not work for forty years, a "spousal benefit" based on their husband’s earnings is paid to married women.
- Starting with the month you reach full retirement age, you can get your benefits with no limit on your earnings from a job.
How to be eligible
To be eligible for benefits, you must have at least 40 quarters, or about ten years, of Social Security qualified wages or self-employment income. Most earnings from regular jobs are qualified wages. These do not have to be consecutive years, but cumulative.
Once you retire and start to receive Social Security benefits, you keep receiving them until you die. To protect your benefits from inflation, you also receive an annual cost of living adjustment (COLA).
How benefits work
Benefit payments are based on 40 years of employment. The lowest five are dropped and the remaining 35 years are averaged. This is a "retired worker’s benefit." Because so many women would not qualify, as they do not work for forty years, a "spousal benefit" based on your spouse’s earnings is paid to married women and, in some cases, divorced women. Survivor’s benefits may be paid when a woman outlives her spouse and receives the spouse’s full Social Security benefit amount.
When you can receive benefits
You are eligible to receive your own retired worker’s benefit between the ages of 65 and 67, depending on the year you were born, and reduced benefits at age 62. Spousal benefits and survivor’s benefits will be different. If you continue to work past your full retirement age, your monthly benefit will increase.
Every year the Social Security Administration sends you a statement identifying your earnings and estimated retirement benefit. You can also get this information at any time from www.ssa.gov.
Retire early?
Suppose you want to retire early and receive your retired worker’s benefit, but you want to keep working part-time. Depending on your earnings, that may reduce your benefits. Social Security sets a limit each year, adjusted by the cost of living, above which you begin to reduce your benefit. Once you reach the annual limit, you will lose one dollar in Social Security benefits for every two dollars over the limit. Starting with the month you reach full retirement age, you can get your benefits with no limit on your earnings.