Three costly women's mistakes before retirement in the United States
'07.04.2021'
Source: Money Talks News
When planning for retirement, women in the USA face unique, typically female problems, and their mistakes can lead to more modest retirement benefits, writes Money Talks News.
In general, women tend to earn less money and live longer than men. This combination of factors can lead to lower social benefits and other problems. Let's look at some of the most expensive women's mistakes when planning for retirement in the US.
Mistake 1. Too early to retire
The decision to start receiving retirement benefits too early can be costly for men too, but this negative effect is usually exacerbated for women, especially for single women.
It is usually more difficult for women than men to save money for retirement, since they have lower earnings over their entire lives and longer life expectancy compared to men. For single women, these problems are exacerbated by the absence of a significant contribution of a partner to income, which is taken into account in social security, or any other type of retirement income.
In some cases, women also have less confidence in their financial capabilities than men.
Considering all of these factors, it may be particularly wise for single women to delay receiving their pension until as late as possible, in which case their monthly benefit will be higher by the time they are first paid.
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Mistake 2. Forget about your ex-spouse
If you have been married for at least 10 years and then divorced, you may be eligible to receive a pension through your ex-spouse.
Therefore, before relying solely on your own funds, find out if you can get a more substantial monthly payment by submitting an application through your ex-husband's income statement.
“If you are currently unmarried and you and your ex-husband are at least 62 years old, you can claim spousal benefits,” says Russ Settle of Social Security Choices, a website that helps people decide when to retire.
Please note that your own retirement benefits after reaching full retirement age should be less than half of your ex-husband's benefits. When you apply for a pension through an ex-spouse, this will lead to the application for your own pension payments, if you were not born before 1954.
An important clarification: remarriage leads to the loss of spousal benefits through an ex-husband. But if your next marriage also ended in divorce, you will again be eligible for spousal benefits.
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Mistake 3. Allow husband to make one-sided decisions.
If you are married, you would like to think that your spouse is acting in your best interest. However, this does not always happen, especially when a decision is made about when to retire.
A study conducted by the Center for Pension Research in 2018 showed that a husband can increase the amount of a survivor's benefit for his wife by 7,3% each year, postponing retirement. However, the study says that many husbands do not take into account the impact that their retirement age may have on the wife and her benefits.
Instead, many husbands tend to consider more pressing issues and decide to apply for social security earlier. Even after learning about the possible impact on their wives, many husbands do not change their minds.
It’s a good idea to talk with your spouse about how best to arrange retirement time for both of you and when each of you will submit your own application, coordinating important issues and nuances.
