Lorie Konish at CNBC covered new AARP research showing women receive about $4,800 less a year in Social Security than men, and rely on the program more heavily in retirement. Lower lifetime earnings and time out of the workforce drive most of the gap. She asked what women can do about it when it is time to claim.
My focus was coordination. A spouse's claiming decision is not just their problem. When the partner with the higher benefit dies, the surviving spouse may inherit that amount, and if the deceased spouse claimed early and took a reduced benefit, the survivor benefit is reduced too, for life. Women, who outlive men on average, are the ones who end up living on that number. Women should care deeply about that coordination.
In my practice I carve out an entire meeting just for Social Security. I walk clients through the options, answer every question, and then let them make the claiming decision themselves, because it is their life and their tradeoffs. Nobody should be pushed into a date.
CNBC asked whether professional help is worth it here. My answer: the difference between a good decision and a bad decision on Social Security probably pays for a financial planner. For a couple, the coordinated decision is often worth six figures over two lifetimes.
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