Retired Husbands, Working Wives

Ladies may have a good reason to continue working while leaving their husbands to tend the home. A recent study suggests that a woman on tap to earn a lower Social Security payout than her husband can shore up her own benefit by continuing to work rather than retire at the same time he does. This can be particularly beneficial if her husband is older by several years.

Since Social Security calculates benefits using the average of a worker’s 35 highest income years, retiring during higher earning years can be a detriment. In this scenario, if a woman keeps working another five years she may be able to erase five of her lowest earning years, yielding a higher benefit.

New research from Harvard University estimates that a woman who retires at age 70 instead of 62 can increase her “Social Security wealth”, on average, by 15 percent.1 This includes the inherent increases that accompany delayed benefits. Furthermore, her work earnings can mean the difference between boosting the overall household income and living on two retirement benefits, particularly if those benefits began before full retirement age. And when she does retire, their household income will be higher as well.

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1Nicole Maestas. Harvard University and NBER. May 2016. “The Return to Work and Women’s Employment Decisions.” Accessed Sept. 14, 2016.

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