Women and Social Security Income Planning

The Emerging Opportunity For Niche Financial Advisory Stewardship

By Martha Shedden, ClientFirst Financial

Ms. Shedden is an associate and Social Security specialist with ClientFirst, which educates consumers on Social Security income planning and trains financial advisors how to embrace Social Security income planning. Visit ClientFirst. e-mail to advisors@clientfirst.info

Making a smart Social Security income election decision may be one of the most important financial decisions a woman makes in her lifetime.  Since women have longer life expectancies, often marry men older than themselves, and, therefore, are usually the survivor of the two, the Social Security decision has a much greater impact on them.

Social Security Income Planning is a Blue Ocean Opportunity for advisors.  The Baby Boomer “Silver Tsunami” wave of retirees is here and they are a “perfect storm” demographic for a number of reasons but most important is the sheer number or pre- and early retirees, over 10,000 Boomers are retiring every day.

When and how women make their Social Security income election tends to have a “multiplier effect” and can greatly impact the longevity of their retirement income stream and assets.  Since Social Security is a given, stable, lifetime income stream and (so far) even includes cost-of-living adjustments, advisors should be mindful to evaluate it first when creating a retirement income plan for clients.

Many of the techniques to maximize Social Security require the client(s) to delay drawing Social Security from age 62 until age 66, or even 70.  This positions the advisor to help clients fill this critical income gap by managing allocation and drawdown of other savings, IRAs, pensions, etc. to extend their clients’ years of financial security.  A woman’s Social Security income election made in the context of this prudent asset allocation and retirement income positioning will literally pay off for her.

To address the female demographic, advisors will need to become educated on Social Security income claiming concepts and techniques for couples, singles-for-life, widows, and divorcees.  Also, advisors should be adept at quickly adopting turnkey software to address each of these scenarios to provide clear options and solutions for their clients.

Much is being written and discussed lately on the topic of financial advisors reaching out to the women’s market.  First it was called a niche market for advisors, but make no mistake; women needing financial advice are not a niche; they are a huge demographic.  In the financial advisory world however, they are still a minority, both as practicing advisors and as clients in this male dominated field.

Social Security Income Planning, The Buzz & Basics

Social Security has become a hot topic in both the media and everyday conversation.  It’s a complicated subject and most of the discussion is on the future of the Social Security trust fund.  How long will it last?  Will it be there for our children?  What changes need to be implemented?  I would like to redirect the discussion to something much more immediate and valuable to both financial advisors and Boomer age women especially.  And that is the need for the current wave of pre- and early retirees to make a smart Social Security income election decision.

What exactly IS Social Security Income Planning?  Quite simply, it is taking full advantage of the Social Security rules and strategies to maximize a client’s household lifetime income amount.  Most people do not realize they can lose a significant amount of money by taking Social Security the wrong way at the wrong time.  For couples and many single women (e.g. divorced, widowed) though, the difference in lifetime income between a smart Social Security strategy and just collecting at the earliest they are eligible can be over $200,000.

Many people approaching retirement “really do not know what they don’t know about Social Security.” This applies as well to advisors and other centers of influence such as accountants, attorneys and human resource managers. It is common to hear the subject of Social Security dismissed with one of these responses, “It won’t be there for me, so I don’t count on it”, “It’s not really that much money anyway”, or “I’m just going to take it as soon as possible because it’s going to run out and I want to get whatever I can now.” The majority of people approaching retirement age are not aware of the significant impact this one-time decision will have on the longevity and lifetime total value of their retirement assets.

Most of us know that if we wait to claim our Social Security benefit we will receive a larger monthly payment.  The difference between claiming at the earliest age of 62 and waiting until Full Retirement Age (FRA, age 66 for most Boomers) is an increase of 25%.  Additionally, Delayed Retirement Credits of 8% per year are applied between FRA and age 70, or an additional increase of 32%.  The total difference in the monthly benefit between age 62 and age 70 is 75% and this amount is what you will continue receiving for the rest of your life.

Despite the benefit of delaying, it’s not really as simple as just deciding when to claim.  The timing of Social Security does depend on your age, but it also depends on the relative ages of a couple, the Social Security income benefit amount you are entitled to at your full retirement age, your life expectancy, your relationship status – are you single, married, divorced or widowed, what other retirement assets you may have and if you have other income or plan to continue working.


Perhaps the most important claiming consideration is the fact that you now only have one chance to get it right.  Prior to December 2010 if a person started claiming SS and felt they had “made a mistake” they could pay back what they had collected – without interest – and re-file.  This was essentially like getting an interest free loan from the government.  Now though, once you file you only have 12 months to redo your Social Security election if you feel you’ve made a mistake.   This is why it is now – more than ever – critical to understand what is at stake and make the right decision the first time.

Why Social Security Income Planning is So Important To Women

No doubt, Social Security is important to everyone, men and women, however, there are some very strong statistics that make this decision even more critical for women.  First, their life expectancy is longer.  On average women in the United States live 4-5 years longer than men.  Second, women spend more years out of the workforce care giving – they take time off, or work part-time to raise their children and often they are the ones caring for elderly parents.

Despite the benefit of delaying, it’s not really as simple as just deciding when to claim. The timing of Social Security does depend on your age, but it also depends on the relative ages of a couple, the Social Security income benefit amount you are entitled to at your full retirement age, your life expectancy, your relationship status – are you single, married, divorced or widowed, what other retirement assets you may have and if you have other income or plan to continue working

Third, women historically have lower lifetime earnings.  This is changing rapidly in younger generations, but it’s still true for most of the Baby Boomer generation.  Fourth, women often marry men older than themselves so, as a couple they are the likely survivor. And fifth, as the survivor they are the ones who will “inherit” the larger of the two social security income amounts.  This is worth emphasizing and is probably the single most critical aspect of Social Security income planning.  It is VERY important for a couple to plan for the survivor income amount to be as large as possible during the years when she is a widow.

Social Security benefits are rightfully ours.  We have worked hard contributing to the system for many years.  This benefit should be considered an asset and treated as such.  The goal is to make a smart, educated claiming decision based on the Social Security rules and strategies available to you.  There is clearly a need for the knowledge and understanding of Social Security income planning, but at the same time a real lack of quality Social Security income planning services.

The Emerging Women’s Financial Planning Market

It is surprising that we are still discussing the women’s financial planning market as a niche or novelty when the statistics are so overwhelming.  Women are quickly surpassing men when it comes to making money.  It began as women started outnumbering men in the number of bachelor degrees awarded and they now also comprise the majority of students in many professional schools such as medicine and law.  This correlation between education and income has been well documented, therefore it is no wonder that the earning power and accumulated wealth of women has risen.

Women already make up a majority of the workforce and more than half of all managers, with their higher salaries, are women. They account for more than 50% of all stock ownership and half the private wealth in the U.S.  They also control or influence 67% of household investment decisions, and therefore have a great deal of buying power.


So if women are making and controlling so much of the nation’s wealth, why are so few seeking financial advice?  It’s a combination of factors, but mostly the historical factors of men being the breadwinners and therefore seen as the financial decision makers and also the male dominance in the financial advisory fields. The number of women advisors is increasing, but they are still in the minority.  This is not to say that women necessarily prefer to get advice from other women, but it sets a different perception as any male-dominated field begins to see a growth in women practitioners.

Also, Boomer age women still have the recollection of how their parents dealt with money.  For the younger generation though the shift has occurred.  It does not seem unusual to them, girls and boys, if a women is self-reliant, hard-driven and the major breadwinner. The majority of working wives in the next generation will now out-earn their husbands. And it’s not just these married women who will have higher earnings; single women with no children now already out-earn their male peers.  There is definitely a tremendous market for financial advisors who reach out to women, whether they are single, married, divorced or widowed.

A Winning Strategy for Financial Advisors and Women

The financial and economic contraction the past 4-5 years has had a huge impact with the loss of asset value and decrease in Pension Plans so we are working longer and retiring later.  This is partly out of economic necessity, but somewhat due to the fact that we are living longer and want to maintain a quality life in those later years.  At the same time, as we near retirement there is a shifting from wealth accumulation to lower risk retirement distribution.

Therefore the “hunt for income is on.”  Retirees are looking for ways to increase income and, although they may not be aware of it, Social Security is one of the ways to do that.  At the same time there is a shortage of professional financial expertise in Social Security Income Planning. This creates an uncontested – or Blue Ocean Opportunity – in the market space.

Traditionally the large brokerage firms and banks have ignored training their advisors on this service. It is not an upfront moneymaker, however it provides a tremendous amount of good will and segues naturally to other financial planning for retirement.  In fact, Social Security Income Planning should NOT be done in a vacuum, but rather it should be considered as the FIRST retirement asset and planned in the context of all other retirement assets.

As an advisor working to gain the trust of women, Social Security Income Planning is the perfect service to offer. It is a very natural, non-threatening topic.  Women want to get to know their advisor, they want their advisor to understand them and they want a relationship that they can trust.  They will appreciate your knowledge and respect you for providing a service to them that is not merely another product sale.  What better way to show you care about their well-being than to help them plan for maximizing this most important retirement asset?

Financial Advisors who offer Social Security Income Planning in their practice will not only be providing a valuable service to their existing clients, but will become known in their community as the one to go to for this service.  And women – being the talkers that we all are – will share with their friends and family when they find a financial advisor that they connect with and who has made their retirement a little more secure.  Women are a wonderful source of referrals if you earn their trust.


We are working to help educate and train financial advisors, accountants, estate planners, and human resource personnel about this important retirement income source so they can embrace Social Security Income Planning and incorporate this service into their practice.

Social Security rules and strategies can be very complicated and overwhelming to understand just by reading a book.  Therefore we have found that if it is presented in a compelling audio-visual way the most relevant information can be learned fairly quickly.   As advisors learn and absorb the educational material, they can use it in tandem with high caliber turnkey software to accelerate their learning and client application curve.

With the right training and client outreach, financial advisors who enjoy educating and working with women clients and who want to strengthen this area of their practice, can become an invaluable resource in their communities.