Women tend to live longer than men, which means they spend more time in retirement and often do so with less savings. As a result, women retirees, on average, could spend 70% of their Social Security benefits on health care costs.
Women count on Social Security to pay for more than half of all their expenses in retirement. But claiming benefits early, which 80% of retired women currently collecting Social Security did, can be a costly mistake that locks in a lifetime of lower income, according to a newly released Harris Poll. The online survey included 465 women over age 50 who are retired or who plan to retire in the next 10 years. Only 5% of those currently collecting Social Security waited until age 70 to claim the maximum benefit.
“Too many women retirees have no retirement income outside of Social Security,” said Roberta Eckert, vice president of the Nationwide Retirement Institute, which commissioned the survey. “And even for women that do, the fact that they live longer makes maximizing Social Security benefits extremely important.”
About 30% of the women surveyed said their Social Security benefit is less than they had expected. But 86% of those who worked with a financial adviser said their Social Security benefit was as expected or more than they expected.
“There are a variety of efficient filing strategies open to women, but too few seek professional advice from a financial adviser to take advantage of them,” said Kevin McGarry, director of the Nationwide Retirement Institute.
Only 13% of the women in the survey said they received advice on Social Security from a financial adviser. But it's not because they don't want advice. More than 60% of the women surveyed said that if their financial adviser could not show them how to maximize their benefits, they would switch to an adviser who could.
Nationwide projected that an average female retiree who claimed benefits early could spend 70% of her Social Security benefits on health care costs in retirement.
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Mary Beth Franklin is a certified financial planner.
