The significance of Social Security for women in retirement cannot be overstated. This is due to several factors: women are less likely to have pensions upon retirement, they tend to live longer than men, and they often have lower lifetime earnings due to pay inequity and time spent out of the workforce caring for family. As a result, many women are living well into their eighties and spending more years in retirement than they did working, which places a significant strain on the Social Security system.
According to a special report titled "Why Most Women Can't Afford To Retire" in Ms. Magazine, 42% of all women over seventy-five are living on less than $13,000 a year. Furthermore, it is estimated that only 20% of Baby Boomer women (born between 1946 and 1964) will be financially secure in retirement.
Statistics show that 80% of women will need to take charge of their own finances at some point. It is crucial for women to fully understand their personal finances and investments. If you're unsure about your finances, seek help from your spouse, enroll in a financial literacy class at your local community college, or borrow some finance-related books from the library.
It's never too soon to start investing for retirement. The sooner you start, the longer your money has to grow. Even saving just $25 a week starting at age 35 could add up to $100,000 to your retirement fund. Automate the process by having the money automatically deducted from your paycheck.
Whenever you take a job, always ask about their pension plan. Find out how long until you are eligible, the vesting requirements, and if the employer will contribute to and/or match your funds and if so, at what percentage rate.
The retirement age for full benefits is currently 65, and the earliest age at which one is eligible for benefits is 62. If you take your retirement benefits early, your benefits could be reduced by as much as 30 percent for the rest of your life. The eligibility age for full Social Security benefits has been revised from 65 to 67 years of age, to be phased in by the year 2022.
Here are a few resources on Women and Social Security. It's important to be aware of the different opinions and to realize that the more you can save for your own retirement, the better off you will be regardless of what happens with the Social Security System.
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