7 Social Security facts women need to know

September 06, 2023

two women meeting together

Social Security has long been a relied-upon source of income for retirees. As you meet with plan participants, you may need to have different conversations with women than you do with men, especially when it comes to exploring the role of Social Security benefits in their retirement strategy.

That’s because women may not be aware of special circumstances that could affect their Social Security benefits. The following facts and interesting tidbits can serve as conversation starters.

1. Women earn less Social Security than men, on average

While the wage gap is decreasing, women still earn only 83.7% as much as men, on average, regardless of their education or social status.1 Since Social Security incomes are calculated based on an individual’s earnings records, a woman’s Social Security check also has a greater likelihood of being lower than a man’s.

While it’s important for employers to address the wage gap, it’s also important to help women face the present reality when talking about their future retirement income. 

2. More women collect Social Security than men

Women make up more than half (55.2%) of all Social Security beneficiaries age 62 and older, and nearly two-thirds (62.8%) of beneficiaries over the age of 85 are women.2 

Regardless of age, creating awareness among women is a key to helping them maximize their Social Security benefits and build sound financial strategies for retirement. Help guide them through these aspects of Social Security and how they could affect their financial futures if not properly addressed.

3. On average, women live longer than men

Women who reach retirement age can expect to live, on average, to age 87, three years longer than men.3 While generally good news, it also presents added longevity risks because they’ll need to cover more expenses over that time. In short, a woman’s retirement income needs to last longer than the average man’s. And, because their Social Security benefits may be lower to begin with, the challenge of covering those expenses mounts.

Backed by the U.S. government, Social Security is among the few forms of guaranteed retirement income that can’t be outlived. But it’s not intended to be a sole source of income. On average, Social Security benefits represent less than one-third (30%) of the income of the elderly, with women relying on it more than men.4 It’s imperative to help female plan participants ensure their financial futures are secure.

4. When possible, wait until full retirement age to file for benefits

This rule of thumb applies to all genders, but since women generally earn less than men, it is even more crucial. Full retirement age for anyone born in 1960 or later is 67. A person can claim benefits as early as age 62, but they could see a 30% reduction in benefits! Those who are willing to wait even longer than full retirement age and claim their Social Security benefits at age 70 can see a marked difference in their take-home income, up to 24% more than claiming at age 67.5 

Ensure that your female plan participants are fully informed about the financial implications of claiming benefits too early, and consider ways to help them bridge the gap with other dividends or savings.

5. Let Social Security know about a name change

If a woman changes her last name, she should report the change to the Social Security office to ensure they record the person’s earnings properly. Failing to do so could mean not receiving all the benefits that are due to her, and could even delay any income tax refunds that may be due. She will likely need to show legal proof of the change, such as a marriage certificate, divorce decree, court order or naturalization certificate.3 

6. A divorced woman may qualify for spousal benefits

A divorced woman who remains unmarried and is age 62 or older may qualify for a spousal benefit equivalent to half of the ex-spouse’s full retirement age (even if the ex-spouse remarried).6 

The marriage must have lasted at least 10 years. If eligible on her own record, she’ll get paid those Social Security benefits first. However, if her ex-spouse’s benefits are higher, Social Security will pay her the difference, without reducing the amount the divorced spouse receives.6

7. A widowed woman may qualify for spousal benefits

A surviving spouse age 60 or older (age 50 or older if they have a disability) is eligible to receive their deceased spouse’s monthly benefits. Likewise, if an ex-spouse dies, she could get benefits the same as a surviving spouse, provided the marriage lasted 10 years and she didn’t remarry before age 60.7 

Ensuring that women understand their unique potential risks and rewards of Social Security needs to be part of a retirement strategy. Help women maximize their finances both now and in their golden years.

1 U.S. Dept. of Labor, 5 Fast Facts: The Gender Wage Gap, March 14, 2023
2 SSA.gov, Social Security Beneficiaries by Age, June 2023
3 SSA.gov, What Every Woman Should Know, October 2022
4 SSA.gov, Fact Sheet, 2023
5 SSA.gov, When to Start Receiving Retirement Benefits, January 2023
6 SSA.gov, Benefits for Your Family, undated
7 SSA.gov, If You Are the Survivor, undated