In this video, I share some important Social Security tips for women.
While only part of your overall retirement plan, Social Security can play a big role.
Transcript of Video:
Hi, I’m Russ and today, in this video, I’m going to share with you the three most common mistakes that women earning over $100,000 make when it comes to their Social Security. And, if you stick around till the end, I’m going to share the number one mistake that I find that these same women make with their Social Security decisions and planning.
But first, let’s talk about a woman that I met a few years ago. Let’s call her Jane. Jane was introduced to me by a mutual friend. At the time she was about 64 years old or so. She had begun taking her Social Security benefits at age 62 and what I later found out as I got to know Jane is that hindsight being 20/20 if she had to do it over again I would have recommended that she defer her Social Security benefits.
Without getting into all of the details and the nitty-gritty, basically Jane took some options off the table for herself and eliminated some tax planning opportunities that might have saved her tens of thousands, if not hundreds of thousands of dollars over the remainder of her life. These things included deferring Social Security, a pension she was eligible for, maybe doing some partial Roth IRA conversions, and looking at her overall tax picture.
Don’t be like Jane. There are lots of opportunities and lots of decisions to make when it comes to your Social Security, and in this video, my goal is to share some things with you to help you make the right decision and get it right the first time.
Now, let’s talk about the three mistakes I find that women often make when it comes to Social Security. Number one, they file too early. As I just shared with you the story about Jane, she filed early, which wound up later costing her, if not tens, maybe hundreds of thousands of dollars. She could have prevented that with some more thoughtful planning, some better education and a better understanding of her options, and the choices available to her and the impacts of those same choices. So while I don’t always recommend that people defer all the way to age 70, you should also be careful about filing too early.
Number two, women don’t often check their earnings record. Your Social Security benefit is going to be based on your earnings history, and for high earning women, women that have earned hundreds of thousands of dollars over their career, a mistake in your earnings record with Social Security can cost you hundreds of thousands of dollars in benefits over the remainder of your life. It’s worth checking to make sure they got it right so your Social Security benefits are correct, and you get everything you’re entitled to.
Number three, women often don’t take into account spousal benefits. They don’t include the impact of their husband or wife. They don’t include even their divorced spouse. If you were married for ten years or more and you’re now divorced, you are still eligible for spousal benefits. While you may be a high earning woman and your benefits might be higher than your spouse’s ever were, it’s important to look at this and see the impact it could make on your Social Security decisions and plan.
Finally, the number one mistake women make with Social Security is, and I’ve already alluded to this, it’s not considering your entire tax picture. It’s looking at when to begin benefits, at the right time. You also need to consider things like longevity and your health history, but it’s really taking a nuanced and thoughtful approach to your taxes. Look at other income sources like continued earnings, if you continue to work into your 60s or beyond. Pension income if you’re eligible for that. RMDs, required minimum distributions are ultimately going to begin around age 70 for IRAs, 401Ks, 403Bs, things of that nature. That’s going to create taxable income. So you need to be aware of the timing and the amounts of those so you can do some thoughtful tax planning today and along the way to make sure that you’re getting the most accurate tax dollars that you can each and every year for the remainder of your life.
So, to quickly recap, the three most common mistakes I find that women earning over $100,000 a year make with Social Security is one, filing too early. Number two, not checking their earnings record, and number three, not coordinating their benefit decisions with that of a spouse or even an ex-spouse. And finally, the number one mistake I find women make when it comes to Social Security is not considering all of their taxes and looking at Social Security in the context of their broader retirement and financial plan.
So I hope this video has been helpful for you. I invite you to get in touch with me and let me know if you would like a copy of my free retirement guide. Just get in touch and let me know. I’d be happy to send that to you. I look forward to connecting with you next time.
End of Transcript
I hope you found this video on Social Security tips for women helpful as you work on your personal retirement planning.