Message to Homemakers: Building Up Your Own Social Security Might Not Be Worth It

If you have spent your life homemaking, you will likely earn more social security benefits as a dependent wife (or widow) than you would by seeking extra work now. pikselstock/Shutterstock

I will occasionally get questions, almost always from women who spent much of their adult life as homemakers and are now approaching their senior years, who tell me that they plan to get a job to start building up their own Social Security.

My usual message to them is that it’s probably not worth it. I’ve saved up some questions about this topic and will answer them today.

Q: I am 60 years old. My husband is 65 and plans to start his Social Security when he is 67. I worked for a few years after I got out of school. But after we got married, I stayed home for the next 35 years raising our kids and maintaining our household. I have 28 Social Security credits and know I need 40 to qualify for benefits. I am planning to get a job to earn the 12 extra credits I need. Is this a good idea?

A: Well, if part of the reason you are thinking of working is to get out of the house and earn a little extra money, then, of course, you should go for it. But if you are doing so just to build up your own Social Security, then it’s probably not worth it.

Why? Because you’re always going to get more money as a dependent wife (and someday as a dependent widow) on your husband’s Social Security record. I'll use a little example to explain this in more detail.

Let’s say your husband’s benefit is going to be $3,000 per month. When he files at 67, it sounds like you‘ll be 62. If you file for spousal benefits then, you’d get an amount equal to about one-third of his rate, or $1,000.

Now let’s say you did work and earned the extra 12 credits you need. Because you‘d have the bare minimum of 40 credits, that will translate into a very small Social Security retirement check for you. My guess is you might get $150 per month. So when you reach age 62, you’d get about 70 percent of that, or $105. Then you would get $895 in spousal benefits to take you up to the $1,000 wife’s rate you are due.

In other words, you'd end up with the same $1,000 Social Security check each month. Working and paying taxes and acquiring those extra 12 Social Security credits nets you nothing extra, so why do it? (Again, unless you just want to get out of the house and work and make some money on your own.)

Q: I am a 45-year-old stay-at-home mom. I’m married to a 55-year-old well-paid lawyer, and we are secure financially. My kids are now old enough to be on their own. So I’m thinking of getting a job because I‘d like to have my own Social Security someday. However, our accountant says it’s not worth it because I’ll always get higher Social Security benefits from my husband. What’s your take on this?

A: Part of my message to you is the same as the first answer. (Do you want to get out of the house? Do you want to work and earn some money on your own? etc.)

However, my Social Security message is a little different in your case. Even if you work for the next 15 years or so, there’s still a pretty good chance you'd end up getting higher spousal benefits on your husband’s account.

However, there are a couple of other issues to consider. One of those is your long-range health. If you should happen to become disabled before reaching your senior citizen years, you wouldn’t be due any spousal benefits until you are 62. Or to put that another way, there is no such thing as a Social Security benefit for a disabled wife who is under 62. But if you do take a job, after five years, you would be eligible for Social Security disability benefits on your own record if something were to happen to you. With your husband’s big income, that’s maybe not too important.

But it is something to think about.

The other issue involves future widow’s benefits. Given the difference in your ages, it’s likely that someday your husband will die before you do. As I said about spousal benefits, even if you worked for the next 15 years, you would never make enough to exceed in retirement benefits what you would be due as a widow on your husband’s account.

But there is a flip side to that argument that might cause you to consider working for Social Security purposes. Widows who have their own Social Security account have an option they sometimes can use. They can take reduced benefits on one record and later switch to higher benefits on another record. For example, if your husband dies when you are 62, and assuming you do work for the next 15 years or so, you could get reduced retirement benefits on your record and then, at age 67, switch to 100 percent widow’s benefits on your husband’s record.

Q: My husband and I have owned and run a small restaurant for the past 25 years. I do all the cooking. He helps out in the front of the place and does all the marketing and bookkeeping. We both just turned 62 and are thinking about retiring. So we finally started paying attention to the Social Security statements we get annually, and I was surprised to learn that my husband is scheduled to get $2,850 at his full retirement age and I’m scheduled to get nothing because I supposedly don’t have the minimum of 40 credits. I’m so confused because we have been filing a joint tax return for years. How did the government mess this up? And how do we correct this mistake?

A: The government didn’t mess anything up. Your husband (the bookkeeper) did. I have written many past columns about how mom comes out on the short end of the Social Security stick in a mom-and-pop business. And how that happens is that all the earnings from the business get recorded under the husband’s name and his Social Security number.

For self-employed people, filing a joint tax return has nothing to do with the assignment of earnings and credits for Social Security purposes.

What does that is a tax form called the “Schedule SE.” And I will bet my next pension check that if you go back and look at your tax returns, you will see that your husband’s name and Social Security number is the only one listed on that form. So he got all the earnings, and you got zilch.

And as pointed out in prior answers, at this stage in your lives, there is no point in trying to do anything about this. You are going to end up getting higher spousal benefits on your husband’s record than you would ever be able to get on your own account—even if you were able to file amended tax returns for whatever period of time the IRS might allow you to go back and change the records.