As a wife retires, she is going to make the biggest financial decision of her lifetime: her Social Security benefit. However, the wife is usually not the one making that decision – it is her husband. If her husband makes a poor decision, chances are high that only she will suffer the consequences.
The decision I’m referring to is the age that her husband decides to claim his Social Security benefits. His monthly benefit can be critically important during the wife's lifetime, but even more, after he passes away.
Based on a study by the Pew Research Center on families with children, husbands are the breadwinner nearly 75% of the time. As a result, husbands also typically receive the larger Social Security benefit. In 2021, the average Social Security benefit received by women was $1,483 per month. That same year, men received $1,838 per month. Those are just the average monthly benefit amounts. The benefit amounts can be much bigger if the spouses delay claiming them.
The Survivor Benefit
It is an important consideration to make. After the first spouse passes away, the surviving spouse is entitled to the bigger Social Security benefit. This can be their spouse’s or their own. This is called the Survivor Benefit. Women have a longer life expectancy than men. Husbands are an average of three years older than their wives. This means that most wives are going to outlive their husbands, and depend on a large social security benefit.
When that happens, the widowed wife is only going to receive one check from Social Security – the Survivor Benefit. Luckily for her, she can continue to receive the bigger Social Security check, which is often her husband’s. She receives it in the form of a Survivor Benefit.
In fact, over 90% of all Survivor Benefit checks that Social Security sends out every month are sent to women. You are reading that correctly. That confirms the claim that women live longer than men, and most husbands will predecease their wives or die first. Even though the widow continues to receive the bigger of the two checks, she still experiences a 33% - 50% reduction in her Social Security income. This is because the household has gone from receiving two monthly benefit checks, to only receiving one Survivor Benefit.
This can be Critically Important for a Wife's Social Security
For a married woman, the Survivor Benefit is going to play a critical role in maintaining her standard of living after her husband dies. Unfortunately, after her husband dies, too many married women struggle to make ends meet. The major reason this can happen is that the husbands made a poor Social Security claiming decision. They claimed their benefit as early as possible, at age 62.
This not only locks in the smallest monthly Social Security benefit for the rest of the husband’s life while he is still alive. It also becomes the smallest Survivor Benefit possible for his wife after he passes away. Many times that Survivor Benefit isn’t enough and the surviving wife ends up struggling financially. This does not have to be the case.
Husbands making better Social Security claiming decisions can greatly reduce the likelihood that their wives will struggle financially after they die. Once again, assuming her husband has the bigger Social Security benefit, if he delays claiming it as long as possible, he could maximize the size of his regular benefit which will also maximize the size of the Survivor Benefit. If her husband were to claim his bigger benefit at age 70, the benefit amount he would receive will be 77% bigger than the benefit amount he would have received had he claimed at age 62. In this case, by claiming at age 70, not only will her husband receive the biggest Social Security benefit for the rest of his life but he also will leave his wife with the biggest Survivor Benefit possible.
When the husband claims can affect the wife's future
A married woman needs to realize that the age in which her husband decides to claim his Social Security benefits will be one of the most important financial decisions in her lifetime. Currently, 75% of the time the husband has the bigger Social Security benefit and if he makes a poor decision and claims it at age 62, then 9 out of 10 times she will suffer the consequences of his poor decision.
The probability is very high that her husband will predecease her, and when that happens, he will leave her with the smallest Survivor Benefit possible and she could end up struggling to make ends meet after he dies. If her husband delays claiming his benefits until age 70, that benefit will be 77% bigger than the benefit he would receive had he claimed at age 62. If her husband delays claiming until age 70, when he dies he will leave his surviving wife with the biggest Survivor Benefit possible and she will not have to struggle to make ends meet after he dies.
Maximizing the size of the Survivor Benefit would be the greatest gift your husband could ever give you. Make sure your husband knows this.