Earnings history and time away from work can have a lasting impact on retirement income.
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KEY TAKEAWAYS
Women who claimed Social Security at age 62 received about $15,425 annually, while those who waited until age 70 averaged about $27,400.
Women receive less Social Security than men no matter when they claim, and the difference can approach 20% by age 70.
Because benefits are based on earnings history, delaying benefits and building savings can boost retirement income.
For millions of American women, monthly Social Security benefits provide an important source of income. But the latest figures show once again that women continue to receive smaller benefits than men, underscoring a gap that can have lasting effects in retirement.
How Much Does the Average Woman Receive From Social Security?
It’s not news that, on average, women receive smaller Social Security benefits than men. The gap reflects differences in lifetime earnings and years in the workforce, factors that play a major role in calculating retirement benefits.
Among retired workers who began collecting benefits at age 62, women receive an average monthly benefit of $1,286, or about $15,432 annually. Men receive about $18,876 a year on average, meaning women collect roughly $3,450 less annually—or about 18% less.
As you can see above, whether they claim at the earliest age of 62, or wait to claim at 70, the latest possible age, women receive smaller Social Security benefits than men across the board. And those lower payments can add up to tens of thousands of dollars over the course of retirement.
Why Women Often Receive Smaller Social Security Benefits
To qualify for Social Security retirement benefits, workers generally need at least 40 work credits, which is equivalent to about 10 years of work. Benefit amounts are based on a worker’s earnings history, specifically their 35 highest-earning years. If someone has fewer than 35 years of earnings on record, the Social Security Administration factors in years with no earnings when calculating benefits, which can lower their average and reduce future payments.
Because benefits are tied to wages and salaries, women often receive smaller Social Security payments than men. Women have historically earned less on average, and they are also more likely to spend time out of the workforce caring for children or family members. That can result in years with little or no income counted toward their benefit calculation.
Fortunately for many retirees, Social Security is only one piece of the retirement income puzzle. Personal savings, workplace retirement plans, pensions, and other investments can all help supplement monthly benefits.
How Women Can Increase Their Retirement Income
While workers can’t change their past earnings, there are steps they can take to strengthen their retirement finances.
One option is to delay claiming Social Security. Benefits increase for each year workers wait beyond their full retirement age, up to age 70. According to the Social Security Administration, delaying benefits can increase monthly payments by about 8% annually.
Retirement savings can also play an important role. Workers who are still working and have access to a 401(k) will benefit from contributing enough to receive any employer match, while individual retirement accounts (IRAs) can offer tax advantages that help savings grow over time.
For those still building retirement savings, regularly contributing to workplace plans and IRAs can help supplement Social Security income and provide greater financial flexibility later in life.
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