Women Get $354 Per Month Less Than Men: Here’s Why

kupicoo / iStock.com

kupicoo / iStock.com

One of the reasons Social Security checks can cover the bills of some retirees and not others is because benefits are based on pre-retirement earnings. The more you earn working, the more you will enter the Social Security system and the higher your benefit will be. Two retirees can work exactly the same number of hours and years, but still have drastically different Social Security checks.

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This goes a long way toward explaining why the average Social Security check for women is so much smaller than it is for men. As of May 2022, the men received an average of $1,848 per month, USA Today reported. In contrast, the average monthly check for women was only $1,494 per month, a difference of about $354 per month or $4,248 per year.

If you want to know how much that difference adds up over the course of a retirement, consider this: Over a 20-year retirement, the average man will receive about $85,000 more in Social Security benefits than the average woman. Over 30 years, the difference is more than $127,000.

You don’t need an economics degree to figure out why: It’s because women have consistently earned less than men for decades, and that pay gap still exists. Looking ahead to 2022, women earned 82 cents for every men’s dollar, according to the Society for Human Resource Management, which cited research from Payscale’s 2022 State of the Gender Pay Gap Report.

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Women are also much more likely than men to leave the workforce to care for children. The result is that they do not earn as much money as men throughout their professional lives. This has a big impact on your Social Security retirement benefits, which are based on earnings during your top 35 earning years. When someone leaves the workforce for a significant number of years, those years without earnings are factored into the benefit calculation, further reducing checks.

However, there have been some encouraging developments. The Social Security gender gap has been slowly narrowing in recent decades as the gender pay gap has also narrowed. As noted by USA Today, in May 2000, women received less than 77% of the average man’s Social Security check. As of May 2022, the difference was closer to 81%.

For women (and others) in the workforce who want to help increase their Social Security benefits in retirement, the best strategy is to find opportunities to increase income. Consider asking for a pay raise, obtaining licenses and certifications that may lead to a higher salary, or moving to a higher paying job. If you are unable to work outside the home due to caregiving responsibilities, look for remote jobs or side hustle that can generate income.

Just keep in mind that if you get a side hustle that involves 1099 income instead of W-2 income, you’ll need to pay Social Security on your own through estimated tax payments or on your tax returns.

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It’s also important to earn an income for at least 35 years, even if some of those years only involve working part-time or side jobs. If you can get past age 35 while earning a high income, your higher-earning years will replace any lower-earning years you had before.

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Another way to increase your Social Security check is to delay signing up for benefits as long as you can. Although you can enroll starting at age 62, waiting a few years will lead to a larger Social Security check.

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This article originally appeared on GOBankingRates.com: Social Security: Women Get $354 Per Month Less Than Men – Here’s Why