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Successful Women

FALL 2014

The scoop on Social Security

Smart ways to claim benefits after a divorce or the loss of a loved one

Social Security has been in place since 1935 and many rely on it to bolster their retirement resources. If you’re divorced or widowed, you may have extra options to boost your Social Security paycheck by strategically claiming spousal or survivor’s benefits.

Divorced spouse benefits

Many divorced women do not realize that they have the option to claim Social Security benefits on their former spouses’ work record. If you were to start receiving benefits at your full retirement age (FRA), your benefit as a divorced spouse could be equal to one-half of your ex-spouse’s full retirement amount (or disability benefit). This could prove to be even more advantageous when there is a significant difference between your incomes.

To claim that spousal benefit on your ex, there are some requirements you must meet:

1) have been married at least 10 years;
2) be unmarried;
3) be 62 or older;
4) be entitled to Social Security.

And if you’ve been divorced for at least two years, you can collect on your ex’s record regardless of whether or not he has applied for retirement benefits. This holds true even if he has remarried. And another thing: Your ex won’t know whether you have claimed a spousal benefit because the amount you receive has no effect on the benefits the worker and current spouse can receive. 

If you have reached full retirement age and you are eligible for both a spouse’s benefit and your own retirement benefit, you have choices. One of which is to start receiving the divorced spouse’s benefits now but delay taking your own retirement benefits until a later date. This delay offers time for accrual of retirement credits providing higher benefits later.

Survivor’s benefits

Widows and widowers also have a right to file on their spouse’s record as survivors of the marriage. To claim survivor’s benefits, you must have been married to the deceased at the time of his or her death and for at least nine months prior, with a few exceptions. Divorced spouses also can receive survivor’s benefits, as long as your marriage lasted at least a decade and you haven’t remarried (exception: those who remarry after 60).

If you’re at FRA or older when you become a surviving spouse, you can claim 100% of the deceased’s basic benefit. Before then, you’ll receive a prorated amount.

If you begin collecting survivor’s benefits before reaching your full retirement age, you can switch and claim based on your personal record once you reach FRA, if that amount is greater.

Know your options

There’s no one-size-fits-all solution when it comes to Social Security and when to start drawing benefits. The benefits estimator at could serve as a good place to start; however, it’s important to talk to your advisor to determine how to maximize the benefits coming to you and whether it makes sense to apply for benefits on your ex-spouse’s work record.

The information contained herein has been obtained from sources considered reliable, but we do not guarantee that the foregoing material is accurate or complete.

Surviving retirement quicksand

Four challenges women face and strategies to help overcome them

Despite what you’ve seen in adventure films, quicksand won’t kill you – it just trips you up. The same can be said of common problems women face in saving for retirement.
They may suck you in and slow you down, but they can be overcome.

The issue: Longevity.

Predicting how long you’ll spend in retirement is tricky, especially since women tend to live longer than men.

Overcome it by:

  • Being realistic about retirement. Work with your advisor to create savings goals for the life you envision instead of fixating on a specific retirement age. And take care of yourself to avoid spending more on healthcare costs.
  • Delaying your benefits. If you delay the collection of Social Security beyond full retirement age (which varies based on birth year), your benefits may increase.
  • Downsizing. If you’ll want a smaller home in retirement, you can estimate the savings as part of your plan. But don’t forget to factor in associated costs, like selling your current place and moving.

The issue: A smaller paycheck.

Despite increasing education and greater professional success, women continue to make less than men.

Overcome it by:

  • Asking for a raise. Whether you’re getting a new job, moving up in the workplace or coming up on your annual review, don’t be afraid to emphasize the value you bring to your workplace by showing proof of your accomplishments.
  • Maximizing the match. Contribute enough to get the full employer match for your 401(k) or 403(b) account,
    if one is offered.
  • Saving your windfall. The best way to boost savings? Trick yourself. When you receive a raise or a bonus, put it in the bank before you even think about spending it.

The issue: Time out of the workforce.

Women often take on the important (but unpaid) task of caring for children and elderly relatives. Less money earned means less saved.

Overcome it by:

  • Maintaining professional contacts. Stay connected with your network to ease your transition back into the workforce. Consider working part-time or telecommuting.
  • Saving in a spousal IRA. A spouse who works can make an IRA contribution of up to $5,500 (for those younger than 50) on behalf of a non-working spouse. Those 50 and older can contribute up to $6,500.
  • Upgrading your skills. Investing in education can boost your future earning power.

The issue: A conservative approach.

When asked about their attitude toward investing, 49% of women are “willing to take on a risk for the opportunity of a greater financial reward,” compared to 70% of men. That can translate to missed opportunities.

Overcome it by:

  • Increasing your financial literacy. When discussing strategies with your advisor, ask for further explanation on any investment principles you may not be familiar with. Online resources, like, could also be useful for learning more about a wide range of definitions and concepts.
  • Consulting a professional. Your financial advisor can help you pinpoint your tolerance for risk and suggest investments designed to create a reliable stream of income in retirement.

Now that you’re aware of the pitfalls, it’s time to save and invest to overcome them. If you find yourself sinking into quicksand, don’t panic. Instead, shake it off knowing you have an advisor who can help you work through these challenges and make your future the best it can be.

Sources: “Financial Experience & Behaviors Among Women” Research Study (Prudential), U.S. Census data, Social Security Administration, Women’s Institute for a Secure Retirement

The information contained herein has been obtained from sources considered reliable, but we do not guarantee that the foregoing material is accurate or complete.

Baby-ready in nine months

Parenthood demands special financial care

A baby will change your life – and your finances. Take a deep breath and take heart: Here are nine ways to prepare financially.

Month 1: Ready, set, save
Pay down debt and start an emergency fund with three to six months’ worth of living expenses.

Month 2: Budget, baby
Your post-baby budget will depend on many factors. To figure out how the numbers shake out based on your parenting decisions, check out’s First-Year Baby Costs Calculator ( And don’t forget to talk to your financial advisor, too. Having a baby is a major life change that could impact your goals and financial plan.

Month 3: Take care of childcare
Investigate your childcare options early. Perhaps a family member could care for the baby while you work, or you could share a nanny with another couple. To increase parent-baby bonding time, you and your partner might both consider taking leave under the Family Medical Leave Act, or paid family leave
if offered. Fill out the FMLA paperwork as soon as you know the estimated dates of leave and return.

Month 4: Break the news at work
Many women wait until after the first trimester to tell their boss about their pregnancy. Others wait until their baby bump calls attention. Just make sure to communicate in a professional way and expect to answer questions about your return to work after delivery. Think about telecommuting or job-sharing options, and remember, federal law protects mothers from unfair hiring and firing practices.

Month 5: Gather diapers and wipes
The amount of baby stuff pitched to new parents can be overwhelming. All you really need is a new car seat, diapers, wipes, clothing and a place for baby to sleep. The rest is optional, and you can save money (and the environment) if you buy some gear secondhand. Just be sure to do your research and check for recalls.

Month 6: Get savvy about insurance
Put a plan in place for the unthinkable. Review the life insurance offered by your employer, then consider supplementing it with a term or whole life policy. Disability insurance is also a good idea – between the ages of 35 and 65, you’re more likely to become disabled than die. Your advisor can help guide you toward coverage that best fits your situation. One last thing: Make a reminder to add your baby to your health plan as soon as possible after birth.

Month 7: Make a will
You’ll need to plan for the care of a minor child in the event both parents die at the same time. Work with your financial advisor and qualified estate attorney to make sure your bases are covered. And if you already have an estate plan in place, be sure to review and update your documents with the appropriate beneficiary information.

Month 8: Sock away money for education
You’ve been saving since the start, right? If you’ve got surplus dough in the bank when junior arrives, you can use it to start a college savings account. Choose from a 529 savings plan or a Coverdell Education Savings Account, among other options. However, don’t divert funds from your retirement account to the college fund.

Month 9: Reap the tax benefits
In 2014, you can claim a $3,950 exemption for having a child, as well as a refundable child tax credit of up to $3,000. You also may want to adjust the amount withheld from your paycheck for taxes.

The first year of baby’s life is hectic – checkups, first smile, first teeth, first steps – so it’s a good idea to get as much done before delivery day as possible. When your little one arrives and your to-do list is checked off, you’ll thank yourself for baby-proofing your finances.

The information contained herein has been obtained from sources considered reliable, but we do not guarantee that the foregoing material is accurate or complete.