In millions of Americans, Social Security represents a foundational source of income in retirement. While many accept their benefits as a given, the reality is that with a little planning, retirees can significantly increase what they receive from the program.
The Social Security Administration (SSA) uses a detailed formula based on your work history, age, and earnings to calculate your monthly benefit. But within those rules are opportunities to maximize your payout. Here are eight proven strategies to help you get the most from your Social Security benefits.
1. Work for at Least 35 Years
The SSA calculates your benefit using your highest 35 years of earnings. If you work fewer than 35 years, the missing years are filled in with zeros, which drags down your average earnings and your benefits.
“If you only have 30 years of earnings, then five years of zero income are added to your record, which significantly reduces your retirement benefit,” according to the Social Security Administration.
Continuing to work into your 60s especially if you’re earning more than in earlier years can replace those lower-earning or zero-income years and bump up your benefit.
2. Delay Claiming Benefits Until Age 70
You can begin collecting Social Security as early as age 62, but doing so results in a permanent reduction in your monthly payments. For each year you delay past your full retirement age (FRA) which varies from 66 to 67 depending on your birth year your benefit increases by about 8%, up until age 70.
That means someone whose FRA is 67 and who waits until age 70 could see their monthly benefit increase by 24%. According to the SSA, this strategy is one of the most effective ways to boost lifetime income.
3. Know Your Full Retirement Age
Your FRA is the age at which you’re entitled to your full Social Security benefit. It varies depending on the year you were born:
- Born 1955: FRA is 66 years and 2 months
- Born 1959: FRA is 66 years and 10 months
- Born 1960 or later: FRA is 67
Claiming before your FRA reduces your benefit permanently, while delaying it can increase it significantly.
4. Consider Spousal and Survivor Benefits
If you’re married, divorced, or widowed, you might be eligible for spousal or survivor benefits sometimes even if you never worked under Social Security.
- Spousal benefits: You can receive up to 50% of your spouse’s full benefit if it’s more than your own.
- Survivor benefits: A widow or widower can collect up to 100% of a deceased spouse’s benefit.
These benefits can be especially valuable for non-working spouses or those who earned significantly less during their careers. Details on eligibility are available on the SSA’s spousal benefits and survivors pages.
5. Review Your Earnings Record Regularly
Mistakes in your earnings record can lead to lower Social Security payments. It’s important to create a free “my Social Security” account and regularly check your earnings history.
Visit ssa.gov/myaccount to create your profile and review your data. Correcting errors early ensures your benefits reflect your actual work history.
6. Plan for Taxes on Benefits
Up to 85% of your Social Security benefits may be taxable, depending on your total retirement income. If your combined income (including pensions, withdrawals from retirement accounts, and half your Social Security) exceeds certain thresholds, you may owe federal taxes on a portion of your benefits.
You can review these thresholds on the SSA’s tax page. Consider working with a financial advisor to manage your income sources and minimize taxes where possible.
7. Stay Informed About Policy Changes
Social Security rules evolve. For example, legislation like the Social Security Fairness Act, which addresses benefit calculations for certain public sector workers, could affect eligibility or payment amounts in the future.
Stay informed by subscribing to SSA updates or visiting their newsroom. Understanding these changes ensures you can adjust your retirement strategy accordingly.
8. Talk to a Financial Advisor
While the SSA offers many online tools, a licensed financial advisor can help you incorporate Social Security into your broader retirement plan. This includes coordinating with pensions, investment income, and tax strategies to create a sustainable withdrawal plan.
The National Association of Personal Financial Advisors (NAPFA.org) offers a directory of fee-only advisors who can assist with retirement planning.
Final Thoughts
Social Security is more than just a monthly check—it’s a complex system with rules that can either limit or amplify your income in retirement. By understanding how the system works and applying smart strategies, you can make the most of your benefits and enjoy a more secure financial future.
