The 'Motherhood Penalty' Can Unfairly Lower Your Social Security Benefit

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Unfairly, leaving the workforce to bear or raise children—combined with lower wages as compared to men—can have a significant negative impact on a woman's Social Security benefits in retirement.

According to Marcia Mantell, founder and president of Mantell Retirement Consulting, Inc.,women need to learn about Social Security starting as early as age 22. And they need to learn, among other things, two things: the meaning of “dependent spouse” and “independently eligible.”

Dependent moms will be entitled to collect their own benefit at retirement: 50% of her spouse’s Primary Insurance Amount, or PIA (the calculated value at his full retirement age, or FRA), according to Mantell.

“So, if a long-time-full-time-at-home mom has not earned 40 credits to qualify on her own for Social Security retirement benefits, or who has a small benefit from the years she worked before the kids, she’ll get her maximum benefit at her FRA: half of his,” Mantell wrote.

By contrast, moms who leave and re-enter the workforce once or a number of times might be independently eligible for Social Security. At retirement, if they have accumulated 35 years of earnings, and their benefit is higher than 50% of their spouse’s PIA, they are independently eligible  for benefits and will receive their own larger benefit based solely on their work history, according to Mantell.

Moms face significant demands on their time, and often, even in 2020, that means prioritizing family over earnings, said Mantell. “Any time a mom pops off her career path, the implications to her future Social Security benefit are significant,” she says. “It’s common for moms to get a 20% to 25% cut in benefits by moving in and out of the workforce.”

The bottom line for Mantell: Make sure to sign up for your Social Security statement at SSA.gov/mySocialSecurity today and review your information and estimates every year.

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