55 Tips To Maximize Your Social Security Benefits

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Understanding Social Security Benefits

  1. Start Early, but With Caution: Starting at 62 reduces your benefits.
  2. Full Retirement Age (FRA): Between 66 and 67, depending on birth year.
  3. Delayed Retirement Credits: Increases benefits by 8% each year you delay past FRA, up to 70.
  4. Earnings Record: Benefits are based on your highest 35 years of earnings.
  5. Benefit Calculation: Uses your average indexed monthly earnings (AIME).

Strategizing Your Claims

  1. Estimate Your Benefits: Use the Social Security Administration’s online tools.
  2. Spousal Benefits: Claim benefits based on your spouse’s earnings record.
  3. Divorced Spousal Benefits: If married for 10+ years, you can claim benefits based on your ex-spouse’s record.
  4. Survivor Benefits: Widows and widowers can receive benefits based on the deceased spouse’s record.
  5. Maximize Spousal Benefits: One spouse can claim early, allowing the other to delay and maximize their own benefits.

Timing and Financial Considerations

  1. Work as Long as Possible: Higher lifetime earnings increase benefits.
  2. Avoid Early Claim Pitfalls: Claiming early permanently reduces benefits.
  3. Consider Health and Longevity: Longer life expectancy favors delayed claims.
  4. Tax Implications: Up to 85% of benefits can be taxable.
  5. Account for Other Income: Combining Social Security with other income sources affects tax and benefit amounts.

Managing Your Benefits

  1. Verify Earnings Record: Ensure your earnings history is correct.
  2. Understand Windfall Elimination Provision (WEP): This applies if you have a pension from non-Social Security-covered work.
  3. Government Pension Offset (GPO): Reduces spousal benefits if you receive a government pension.
  4. Coordinate with Spouse: Plan jointly for the best financial outcome.
  5. Explore File and Suspend: Strategy to maximize spousal benefits (availability depends on current rules).

Maximizing Earnings

  1. Increase Current Earnings: Higher income now boosts future benefits.
  2. Self-Employment Considerations: Pay Social Security taxes on your earnings.
  3. Avoid Earnings Cap: Benefits are calculated on earnings up to the annual cap.
  4. Use Catch-Up Contributions: For retirement accounts to supplement benefits.
  5. Review Your Annual Statement: Check for accuracy and plan accordingly.

Specific Situations

  1. Disability Benefits: Apply if you’re unable to work before retirement age.
  2. Children’s Benefits: Minor children may receive benefits if they’re retired or disabled.
  3. Family Benefits Cap: Understand the maximum family benefit rules.
  4. Medicare Enrollment: Automatically enrolled at 65 if receiving benefits; otherwise, apply separately.
  5. Combining with Annuities: Use annuities to ensure a steady income.

Optimizing Retirement Income

  1. Partial Retirement: Work part-time while receiving benefits to supplement income.
  2. Adjust for Inflation: Benefits adjust annually for inflation.
  3. Consider State Taxes: Some states tax Social Security benefits.
  4. Minimize Taxable Income: Strategically manage withdrawals from retirement accounts.
  5. Longevity Insurance: Consider annuities for additional security.

Social Security and Employment

  1. Work Beyond FRA: No penalty on benefits regardless of earnings.
  2. Impact of Early Earnings: Earnings before FRA can temporarily reduce benefits.
  3. Benefit Recalculation: SSA recalculates benefits annually if you continue to work.
  4. Self-Employment Earnings: Continue paying into Social Security to potentially increase benefits.
  5. Understand Earnings Test: Reductions apply only until you reach FRA.

Planning for the Future

  1. Update Beneficiary Information: Ensure your records are current.
  2. Consider Long-Term Care Costs: Plan for potential healthcare expenses.
  3. Maximize Pension Options: Explore pension maximization strategies.
  4. Create a Comprehensive Retirement Plan: Integrate Social Security with other retirement income sources.
  5. Seek Professional Advice: Consult with financial advisors for personalized strategies.

Additional Strategies

  1. Minimize Debt: Enter retirement with minimal debt to maximize disposable income.
  2. Utilize Retirement Savings Plans: Leverage 401(k) and IRAs to supplement Social Security.
  3. Consider Roth Conversions: Convert traditional IRAs to Roth IRAs for tax-free income.
  4. Monitor Legislative Changes: Stay informed about potential changes to Social Security laws.
  5. Estate Planning: Integrate Social Security into your overall estate plan.

Final Tips

  1. Stay Informed: Regularly review Social Security updates and policy changes.
  2. Be Flexible: Adjust your retirement plan as needed based on personal circumstances.
  3. Utilize Free Resources: Use SSA resources and online tools for planning.
  4. Network with Peers: Learn from others’ experiences and strategies.
  5. Review Regularly: Periodically reassess your Social Security strategy to ensure it meets your needs.

Social Security Full Retirement Age

Year of BirthFull Retirement Age
1937 or earlier65
193865 and two months
1939 65 and four months
1940 65 and six months
1941 65 and eight months
1942 65 and ten months
1943-1954 66
1955 66 and two months
1956 66 and four months
1957 66 and six months
1958 66 and eight months
1959 66 and ten months
1960 or later 67

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Questions From Our Readers

When will Social Security Benefits run out?

The 2021 report from the Social Security Board says that by 2034, the extra money for Social Security payments will be used up a year earlier than previously thought. But this doesn’t mean Social Security disappears. It means it will only have enough money to pay about 78% of the usual benefits from what people pay yearly.

How does Social Security work if you retire mid-year?

If you retire mid-year, things can get complicated because your yearly income may not be consistent. Therefore, when calculating your benefits, the SSA will average your income from up to three of the most recent years you have worked.

When to apply for social security?

When to apply for Social Security benefits depends on various factors, including your desired retirement age and financial needs. However, the earliest you can apply is at the age of 62. It’s important to note that applying early may result in reduced monthly benefits while waiting until full retirement age can provide higher benefits.

How much social security will I get if I make $60,000 annually?

If someone earns $60,000 a year, their estimated Social Security benefit can be calculated. However, the exact amount can vary based on their age and the number of years they have paid into Social Security. To get an accurate estimate, it is recommended to use the official Social Security Administration’s online calculator.

How do you get the $16,728 Social Security bonus?

To receive the $16,728 social security bonus, individuals must strategically start claiming benefits at the right age. Delaying benefits until age 70 can result in a larger monthly amount and maximize the bonus. By following the guidelines set by the Social Security Administration, individuals can maximize their retirement benefits.

If you don’t file for Social Security, do you still need to claim 401k money on Social Security?

If you haven’t filed for Social Security benefits, your 401k withdrawals or income won’t affect them directly. Social Security benefits are calculated based on your earnings record and the age you start receiving them. However, 401k withdrawals can affect the taxation of Social Security benefits once you start receiving them.

Can my wife receive spousal benefits from Social Security when I retire if she’s already drawing her own benefits, and can she reapply for these spousal benefits when I start receiving mine?

Yes, your wife can potentially receive spousal benefits even if she is currently drawing her own Social Security benefits. She can apply for spousal benefits once you start receiving your Social Security. If her spousal benefit is higher than her current benefit, she will receive an amount that supplements her benefit up to the spousal benefit level. However, the total amount she receives will not exceed the maximum spousal benefit, typically up to 50% of your full retirement benefit.

If I keep working for the next couple of years at a lower-paying job than my previous job, will that lower my SS payments when I get them?

Sure, if you keep working at a job that pays less than your previous ones, it might have a small effect on your Social Security payments down the line. Your Social Security benefits are figured out based on your highest-earning 35 years of work. So, if you’ve already clocked in 35 years with higher earnings, adding a couple more years with a bit less pay won’t really change your average earnings a lot. But if you haven’t hit those 35 years of higher pay yet, then these years with lower earnings will be part of the mix, and that could bring your average down a bit.

If you receive Social Security benefits and become disabled, can you also collect from private disability insurance?

Yes, generally, you can collect from private disability insurance even if you are receiving Social Security benefits. However, the amount you receive from private disability insurance might be influenced by your Social Security benefits. Some policies have provisions that reduce the insurance payout by the amount you receive from Social Security.

Does Social Security pay death benefits?

Social Security pays the surviving spouse or eligible children a one-time death benefit of $255. Additionally, monthly survivor benefits may be available to family members based on the deceased’s earnings record. It does not offer life insurance.

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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