Despite the fact that women on average live longer than men, only 3 percent of women wait to take Social Security benefits as long as possible to receive the maximum amount, according to a survey by Nationwide Financial.

Four in five women elect to take their Social Security before their full retirement age, which locks in a lower payment for life, according to the survey of 471 women age 50 and older who are either retired or plan to retire in 10 years.

Taking Social Security at age 62, generally the earliest time possible, reduces benefits for life. Each year a person waits after full retirement age, usually 66, benefits grow by about 8 percent a year.

Social Security represents an average of 40 percent of the total income Americans receive in retirement. Women who do not maximize their Social Security benefits can miss out on hundreds of thousands of dollars of retirement income, says Nationwide.

Women’s average life expectancy is 86, with one in four reaching 92, says Nationwide.

“There are many reasons women take Social Security early. Some mistakenly believe taking it earlier will result in more money over the long run, while others may have been forced into retirement early and need the money,” says Shawn Britt, director of advanced consulting for Nationwide.
Women not working with a financial advisor are nearly three times as likely than those who do to say their Social Security payment are less or much less than expected (37 percent versus 13 percent), according to the survey. Yet only 33 percent of women work with a financial advisor.

“Women who work with an advisor are more likely to receive good advice on optimizing Social Security,” Britt says. “If you have the ability to sacrifice a little for a few years it is worth it. Maximizing benefits will result in less chance of outliving other income sources and reduce the chance of not being able to maintain your lifestyle.”

Women who took their benefit early report an average monthly payment of $1,025. Those who collected it at their full retirement age have an average $1,270 monthly payment, while those who waited until 70 receive an average monthly payment of $1,630. Married and some divorced women also have the option of collecting spousal benefits on their husbands’ earnings while letting their benefits grow.

“Many people are not aware of the different options available for taking Social Security income,” Britt says.

Collecting as soon as possible makes sense if a person is in poor health, but, more often than not, the decision is tied to an incorrect expectation about longevity or fear of Social Security running out of money, the report says.