Maximize Your Social Security Benefits with These 14 Smart Strategies

Social Security benefits

Social Security serves as a critical lifeline for countless seniors, providing essential income support in their retirement years. In the current economic environment, Social Security’s inflation-adjusted benefits offer a safeguard against the worst inflation seen in four decades.

Rising interest rates have disrupted many retirement portfolios, causing bond fund values to plummet. Social Security can act as a ballast for a typical stock-bond retirement portfolio.  By implementing specific strategies, retirees can maximize their Social Security benefits and secure a stable financial future.

Check Your Social Security Statements

The Social Security Administration (SSA) creates personalized statements annually which can be viewed by creating an account on the SSA website. While you might be tempted to disregard these statements if retirement seems distant, they offer valuable information for planning your future. The statement includes details such as:

– Your estimated monthly retirement benefit
– Potential benefits for your child or spouse if you pass away before retirement
– The spousal benefit your spouse would be eligible for at retirement
– Your annual earnings record

The yearly earnings record is especially crucial, as any discrepancies in reported income could lead to inaccurate Social Security payments.

Fortunately, you can contact the SSA to correct any errors in your earnings history.

Complete Your 40 Credits

To qualify for Social Security benefits in retirement, you need to accumulate at least 40 “credits” over your working life.

You can earn up to four credits per year, so it takes 10 years of employment to be eligible for Social Security benefits.

In 2024, you need to earn $1,730 to receive one Social Security work credit and $6,920 to earn the maximum four credits for the year. Keep in mind that it is possible to have Social Security taxes deducted from your earnings and not receive benefits if you don’t meet the credit threshold.

Maximize Your Highest Earning 35 Years

Social Security benefits are calculated based on your earnings from the 35 highest income years, not your entire working career.

If you haven’t worked for 35 years, your benefits will be reduced for each year without income. To avoid having zeros included in your calculation, consider extending your career a few extra years to increase your lifetime income average. This approach not only bolsters your savings but can also lead to a higher Social Security benefit.

Increase Your Income

If you find your estimated Social Security benefits disappointing, boosting your income can help. Higher earnings enhance your 35-year earnings record, potentially increasing your benefits.

The more you earn and contribute to Social Security up to the taxable maximum, the higher your retirement benefits will be.

The taxable earnings cap adjusts annually to reflect average wage changes. Earnings beyond the taxable maximum aren’t subject to Social Security taxes and don’t factor into your benefit calculation.

To achieve the maximum Social Security benefit, you must earn at least the taxable maximum amount consistently throughout your career.

While increasing income might seem challenging, there are actionable steps you can take: request a raise, aim for a promotion, or increase your billable hours with your current employer.

Alternatively, consider changing jobs, taking on a part-time position alongside your main job, or starting a side hustle. Ensure that all additional earnings are accurately reported on your taxes to count towards your Social Security earnings.

Determine Your Full Retirement Age

Although it is possible to claim Social Security at age 62, your benefits are reduced by around 30% compared to claiming at Full Retirement Age (FRA). Your age plays a significant role in determining your Social Security benefit, along with your income. Full retirement age is based on your birth year and typically falls between 65 and 67 for most individuals. Knowing your full retirement age helps you make a more informed decision about when to start claiming your Social Security benefits.

Decide When You Want to Claim

Similar to reduced benefits if you claim Social Security earlier than your full retirement age, if you delay claiming past your full retirement age, you can boost your benefit amount.

However, waiting beyond age 70 will not increase your benefits.

If you’ve already begun collecting benefits and regret your decision, there’s still hope. Beneficiaries between full retirement age and 70 can voluntarily suspend payments to increase their future benefits. Additionally, if you started collecting within the past 12 months, you have the option to withdraw your claim by repaying the benefits you’ve received.

Regret Starting Early? Payback

If you regret signing up for Social Security within the first 12 months, you can repay all the money you and your family have received without interest and withdraw your application.

This includes paying back any portion of your benefit that was withheld for Social Security taxes and Medicare premiums.

You can reapply for benefits later, resulting in larger monthly payments due to the delay in claiming. However, this option is a one-time opportunity and can only be used once by each beneficiary.

Suspend Your Payments For a Larger Payout

If you initially accepted a reduced Social Security benefit, there’s still a chance to increase your payments.

Beneficiaries who are between full retirement age and age 70 can pause their Social Security payments to accrue delayed retirement credits.

This approach boosts your benefit by 8% for each year you suspend payments until age 70, potentially increasing your benefit by up to 32% if you pause payments for four years.

This method helps you secure larger Social Security payments later in retirement.

Include Spousal Benefits in Your Decision

Marriage can complicate your Social Security planning. Both spouses—and even ex-spouses if the marriage lasted at least 10 years—can claim their own benefits as well as spousal benefits, which could amount to 50% of the current or former partner’s annual payout.

To optimize these benefits, first identify which spouse will likely receive a larger benefit. The spouse with the lower benefit can start claiming Social Security early, allowing the benefit of the higher-earning spouse to increase over time. When the higher-earning spouse turns 70, the couple can then switch to claiming against the higher earner’s record.

If you’ve been divorced after a marriage that lasted at least 10 years, you can claim spousal benefits starting at age 62 if you haven’t remarried and your former spouse’s benefits are higher than your own.

If you remarry, you can’t claim benefits based on your former spouse, but you can claim benefits based on your current spouse. You also must wait at least 2 years after the divorce to claim spousal benefits.

Eligible for Survivor’s Payment

Survivor’s benefits are a form of Social Security designed to compensate for the loss of retirement income following a spouse’s death. As a widow or widower, you have the option to start receiving these benefits as early as age 60.

Keep in mind, however, that claiming before reaching your full retirement age will result in a reduced benefit amount. At age 62, you have the possibility to switch and start claiming benefits based on your own earnings record, which may result in a higher payout.

If your own Social Security benefit is lower than the survivor’s benefit, it may be wise to claim your own benefits at age 62 and then switch to survivor benefits when you reach full retirement age. At that point, the survivor benefits will be at their maximum.

Survivor benefits do not accumulate delayed-retirement credits, so there is no advantage to waiting until age 70.

Remarrying can impact your eligibility for survivor benefits. If you remarry before turning 60, you won’t qualify for a survivor benefit. However, if you remarry after age 60, you might still be able to receive a survivor benefit based on your former spouse’s earnings.

Benefits for Minor Children

If your spouse has passed away and you’re caring for one or more of their children under age 16, you may be eligible to receive benefits as their caregiver. The benefit amount can be up to 75% of the deceased parent’s regular retirement benefit.

These benefits cease once the child reaches age 16, but they can provide much-needed support if your spouse didn’t leave behind life insurance or other financial resources.

Calculate Impact of Other Pensions

If you have a pension from a job where Social Security taxes weren’t deducted from your paycheck, your benefits may be impacted.

Two complex rules could influence your claiming strategy: the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO).

The WEP reduces your benefits using a scaled-down factor based on how many years you worked in positions without Social Security tax deductions.

The GPO lowers your spousal and survivor benefits by two-thirds of your noncovered pension amount.

Should You Work in Retirement

You can indeed work while receiving Social Security, but be aware of the earnings limits if you haven’t yet reached full retirement age. If you claim Social Security before reaching your full retirement age and continue to work, your benefits may be reduced if your earnings exceed the income limits for the year.

In 2024, individuals who have not yet reached full retirement age will see a reduction of $1 in benefits for every $2 earned above $22,320. For those who will reach full retirement age in 2024, the reduction is $1 for every $3 earned over $59,520 until they reach full retirement age.

For those under this age, the Social Security Administration (SSA) reduces your benefits by $1 for every $2 you earn above the annual threshold, which was $19,560 in 2022. This deduction changes to $1 for every $3 over $51,960 once you hit full retirement age.

If you decide to work and claim benefits simultaneously, it’s crucial to manage your earnings to preserve your retirement income. Fortunately, once you reach full retirement age, there are no limits on how much you can earn without affecting your benefits. Additionally, your benefits will be adjusted to account for any previous reductions or withholdings due to excess earnings.

Does Your State Tax Social Security

In addition to Federal taxes, currently 10 states tax social security earnings in 2024 and 2 just stopped.

Colorado, Connecticut, Kansas, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont are currently taxing social security.

Good news for West Virginia resident is the bill phasing out tax on Social Security benefits has been signed into law. Retroactive to Jan. 1 of this year, it applies to 35% deduction for 2024, 65% for 2025 and 100% deduction on Social Security income for 2026 taxes and beyond.

As of 2024, Missouri and Nebraska join the list of states that no longer tax social security income.

Related Article: States Taxing Social Security

Seek Guidance on Your Unique Situation

Social Security can seem complex especially when you add spousal, survivor or minor children benefits into the mix. Since everyone’s circumstances are unique, with various claiming strategies available, it’s important to tailor your decision to your specific needs including your age, life expectancy, income requirements, and other retirement assets. Making informed decisions is crucial as even minor errors can significantly impact your retirement goals.


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