For most retirees, Social Security is a critical piece of the retirement income puzzle. It provides guaranteed income for life, no matter how long you live. And it is inflation-protected, increasing through annual cost-of-living adjustments in most years to keep up with inflation and preserve buying power. But Social Security was never designed to be the sole source of retirement income. To have a comfortable retirement, individuals need to have other sources of income such as a pension, retirement savings or other investments, home equity or even a part-time job.
Social Security is particularly important to women. Because women tend to live longer than men, they spend more time in retirement than men and often do so with less savings given their average lower lifetime earnings. They are also more likely to live alone in old age due to widowhood, divorce or never being married. Consequently, women rely more heavily on Social Security than men. They represent more than half of all beneficiaries aged 62 and older and two-thirds of all beneficiaries over the age of 85.
The role that Social Security plays in women’s lives has evolved over its 90-year history. In the early years of the Social Security program, which was created in 1935, few women worked outside the home and any Social Security benefit they received was usually as the spouse or widow of a worker who was eligible for benefits. But that changed over the ensuing decades as more women joined the workforce. The percentage of women who claimed Social Security retirement benefits on their own earnings record has quadrupled over the program’s history from a mere 12% in 1940 to 51% in 2024.
Today, more than 184 million workers are covered by Social Security program through their payroll contributions and more than 70 million individuals, including retired and disabled workers, their spouses, minor children and survivors, receive monthly benefits from Social Security.
You must work and pay mandatory payroll taxes for at least 10 years to accrue the minimum 40 credits of coverage needed to qualify for future Social Security benefits once you reach eligibility age. In 2026, you pay 6.2% of your gross earnings up to $184,500 and your employer makes a matching contribution. Self-employed workers pay the combined employer-employee rate of 12.4%. Earnings above the annual maximum wage level are not taxed for Social Security purposes, but all wages –even those above the maximum limit—are subject to a 1.45% Medicare tax. The combined Social Security and Medicare payroll tax is 7.65% for both employers and employees.
Social Security benefits are based on your average lifetime earnings, your age at the time you claim benefits, and in some cases, on your marital status if your benefit as a spouse or survivor would be larger than your own retirement benefit. Divorced spouses may be eligible to claim benefits on their ex’s earnings record as long as the couple was married at least 10 years before divorcing.
You can collect Social Security benefits as early as age 62, but they would be permanently reduced by up to 30% compared to the amount you would receive if you claimed benefits at your full retirement age, which is 67 for anyone who was born in 1960 or later. But if you want to maximize your Social Security income, you can increase your benefits by 8% per year for every year you postpone collecting them beyond full retirement age up to age 70. The difference between claiming benefits as soon as possible at age 62 versus as late as possible to at age 70 means increasing your monthly Social Security benefits by 77% for the rest of your life.
Mary Beth Franklin is a Certified Financial Planner™ professional, award-winning financial journalist, and nationally recognized expert on Social Security, Medicare, and retirement income planning. Based in Washington, D.C., she has spent decades helping Americans make smarter decisions about retirement benefits and personal finance. A sought-after speaker and media guest, Mary Beth is a former columnist for InvestmentNews, former Tax and Retirement Editor at Kiplinger Personal Finance, and former congressional correspondent for United Press International. She also hosted the popular Retirement Repair Shop podcast for seven seasons, where she shared practical strategies to help listeners maximize their retirement income and financial security.