When it comes to retirement, single women face unique challenges. And while Social Security planning can be a crucial component for pursuing a reliable retirement income stream, it also adds a layer of complexity. That’s why understanding how to optimize Social Security options is essential.
In this article, I provide key insights into the factors to consider when navigating Social Security filing strategies as a single woman, so you can utilize the plan that’s right for you.
Women’s Longevity
For all older Americans, deciding when to claim Social Security can have significant financial ramifications, but women in particular need to make this decision carefully. That’s because women tend to live longer than men.
In fact, according to the Centers for Disease Control and Prevention, women live an average of about six years longer than men, reaching 80 vs. 74 years old, respectively. This means that women must distribute their money over a longer period of time during retirement, which increases the chance they’ll run out of funds.
However, it’s important to remember that postponing Social Security income isn’t appropriate for everyone. For women with a troubling medical family history, a dire healthcare diagnosis, or an immediate financial need, it might be better to file their claim sooner than later.
The Social Security Administration provides a handy life expectancy calculator you can use to estimate your own life expectancy. However, the calculator doesn’t take into account the positive effects that time can have on money. Meaning you could potentially invest your retirement payout and earn a larger amount.
Individual Filers
Next let’s take a look at Social Security planning from the perspective of an individual filer.
The biggest difference between an individual and a married filer is that single filers receive their payout based solely on their own income; they cannot receive the same amount as spouses, widows, and divorcees.
But there’s an upside too. Single filers don’t have to worry about how their timing in receiving Social Security payouts may affect their surviving spouse.
Individual filers might not have the same options for filing their Social Security claim as spouses, widows, and divorcees, but their motivation to optimize their payout is just as strong.
Optimizing Your Claiming Strategy
Now we can explore a summary of the optimal claiming strategy for single filers.
Delaying your claim as long as possible is a smart strategy for single filers to optimize their Social Security planning. When you delay your claim after reaching full retirement age, the amount of your monthly check increases by 8% annually until you reach age 70, at which point the delayed retirement credits stop.
So, resisting the temptation to file your claim early not only puts yourself in a better position to save more into your retirement accounts, but you also increase the size of your monthly Social Security check down the road. This could be a gamechanger, especially for those who have minimal savings.
However, waiting to file your claim until you reach full retirement age isn’t the only option. Your home, personal situation, and health are all contributing factors. Customizing your claiming strategy to your particular situation is essential, and a knowledgeable professional can help you consider all relevant factors.
Partner With a Professional
The truth is that Social Security is complex and has lots of moving parts. Trying to navigate it on your own as a single filer is daunting. A wise move is to work with a financial planning specialist to get clarity and potentially increase your Social Security payout.
Our team at Paragon Wealth Management has the knowledge and experience to help you analyze your options and pursue a claiming strategy that aligns with your personal circumstances. We’re here to work with you as you navigate Social Security and the rest of your financial journey.
When you’re ready to work with a financial planner who understands your unique needs and inspires you to be more confident in your financial decisions, schedule a meeting by calling (215) 543-6576 or emailing phil@paragon-wealth.com.
About Philip
Philip Rosenau is Financial Advisor and Founding Partner at Paragon Wealth Management, a financial services firm based in Doylestown, Pennsylvania, dedicated to professionally supporting, educating, and providing informed direction to each and every client. As a longtime resident of Bucks County and the son of a local entrepreneur, Phil understands the unique needs of small business owners. His clients rely on him to build a manageable road map toward their goals, and he takes pride in providing them with the knowledge to understand their unique financial situation, and helping them navigate their financial future with confidence.
Phil obtained a bachelor’s degree in economics with a minor in business management from Drew University, and his passion for creating and maintaining business relationships drove him to join the team at Paragon Wealth Management. Outside of the office, Phil enjoys spending time with his wife, Caroline, and two children. He is a member of the MDM networking group, active with the local CrossFit community, and is also proud to be part of the Drew University Lacrosse Legacy, where he played all four years. To learn more about Phil, connect with him on LinkedIn.