WHY DO MEN SHORTCHANGE THEIR WIVES' SOCIAL SECURITY BENEFITS?

According to a recent study released by the center for retirement research at Boston College (http://crr.bc.edu), most men begin drawing on their social security retirement benefits at age 62 or 63, rather than waiting until their full retirement age or even age 70. The early receipt of benefits means that both the husbands and their wives will receive less each month than they would if they waited.

According to the study, written by Steven A. Sass, Wei Sun and Anthony Webb, this early election has no effect on average on the men. Though they will receive a smaller benefit check each month, this will be offset by the checks they receive between the ages of 62 and normal retirement age. Of course, this is the average. Men who are in ill health would do better to take early retirement and men who expect to live a long time should postpone their receipt of benefits for as long as possible.

This is also basically true of single women, meaning on average they do about as well in terms of lifetime social security benefits no matter whether they start earlier and get more smaller checks or start later and receive fewer larger checks.

But for today's seniors, most wives' benefits are based on their husband's work record. If husbands choose to take benefits before the full retirement age, their wives are penalized twice -- first while their husbands are alive when they get a reduced benefit, usually half of the husband's benefit, and second when the husband dies (which often happens due to women's greater life expectancy) when they receive their husband's benefit rather than their own.

The researchers conclude that most men simply don't understand the implications of claiming benefits early. They suggest a number of potential policy changes, such as requiring spouses to sign off on the decision to claim social security before the beneficiary's full retirement age.

Interestingly, while the Social Security Administration's web site (www.ssa.gov) has a number of excellent calculators to assist beneficiaries in deciding when to retire, none appear to calculate spousal benefits. Based on the Boston College report, adding such calculators would be a good first step.

To read the report, go to: http://crr.bc.edu/index.php?option=com_content&task=view&id=485&itemid=4

-Adapted from: http://hmargolis.typepad.com/elderlawanswers_blog/

1/08