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How to Maximize Social Security Benefits

Finances | October 18, 2023

A senior couple saving money after maximizing their social security benefits.

It’s hard to enjoy your golden years if you’re dealing with money problems. According to U.S. Census data, nearly 30% of people 65 years and older struggle to pay their expenses. While many seniors rely on financial assistance from the Social Security Administration (SSA), they may not receive as many retirement benefits as they would like.

The good news is that there are ways that you can get the most out of your Social Security benefits. Let’s break down some different ways that you can maximize the money you receive each month.

9 Ways to Get the Most Out of Your Social Security

If you want to maximize your Social Security, there’s good news. There are a variety of ways that you may be able to increase your regular payments, add additional benefits, or correct lost earnings. Some tips may be more realistic than others, but the more you or your family can do, the better your chances at bringing in more Social Security benefits than before. 

Maximize Social Security Calculations

You may have worked hard for a long time, but your Social Security isn’t based on your entire career. According to the SSA, your retirement benefits are based on the 35 years in which you earned the most money. This method of calculation can drastically change how much (or how little) you get in Social Security benefits for two reasons:

  • You’ll receive less money if you work for fewer than 35 years.
  • You can maximize your benefits by working a few years later at a higher wage.

The problem with working fewer than 35 years is that it will notably lower your average earnings. Let’s say you worked 32 years – the SSA will simply add three years of $0 to your total. That step will notably lower your average indexed monthly earnings, and the only way around it is to work enough years so that you aren’t getting zeroes added to your total.

The flipside of that situation is that if you work more than 35 years, you have a chance to knock your lowest earning years off your calculation. If you’re still making good money and feel good to keep working, staying on the job for another year or so will add to your overall total and allow you to enjoy higher Social Security retirement benefits as a result.

Don’t Retire Before Your Full Retirement Age

Retiring early does more than potentially add zeros to your average earnings. While seniors can start to collect Social Security retirement benefits at age 62, the SSA will penalize you for not reaching full retirement age. That specific age depends on the year you were born:

  • 1943-1954 – 66 years old
  • 1955 – 66 and 2 months
  • 1956 – 66 and 4 months
  • 1957 – 66 and 6 months
  • 1958 – 66 and 8 months
  • 1959 – 66 and 10 months
  • 1960 and after – 67

For example, someone born in 1965 would need to work until they are 67 years old to qualify for full retirement age. The reason why it’s a good idea to do so is that people who receive Social Security benefits before they reach full retirement age will have their benefits reduced by 25% to 30%. Avoiding that reduction alone makes working until full retirement age worth it for many seniors.

Delay Starting Your Benefits Beyond Full Retirement Age

There are some good financial reasons to wait even longer than full retirement age to collect benefits. While not collecting Social Security early protects you from reductions, waiting even longer can help you earn delayed retirement credits.

These credits are very simple – for every month you delay starting benefits past full retirement age, you increase how much you’ll receive when you do collect them. The exact amount depends on your year of birth, but people born after 1960 can increase their Social Security retirement benefits by up to 24% by waiting until age 70. The SSA even has an online calculator to figure out how much more you can earn.

Temporarily Suspend Your Retirement Benefit Payments

If you’ve already started receiving Social Security retirement benefits, you may still be able to benefit from delayed retirement credits. Seniors who have reached full retirement age can ask the SSA to suspend retirement benefit payments. Doing so can help them earn the same credits that will help increase their benefits when payments resume.

There are several reasons why seniors start receiving payments before suspending them. Some people get a part-time job or inherit some money that will help them delay payments, while others learned too late about the advantages associated with delayed benefits. If the SSA grants your suspension, your payments will automatically start the month you reach age 70. You can also contact the SSA to reinstate your benefits if you don’t want to wait that long. 

Claim spousal benefits

Spousal benefits are another option that some seniors can use to maximize their Social Security benefits. People who are at least 62 who didn’t earn much in their career compared to their spouse, care for a child under age 16, or care for some who became disabled before age 22 may be able to claim spousal benefits of up to 50% of your partner’s eligible amount.

Divorced couples can also claim these benefits. You could claim spousal benefits based on your ex-spouse’s payments if your marriage lasted at least 10 years and you’re at least 62 years old and unmarried – just make sure to work with the SSA to see if you are eligible.

Receive dependent benefits

Seniors aren’t the only people who can maximize Social Security retirement benefits. Dependents may also be able to receive benefits based on their parent’s Social Security. According to the SSA, dependent children and grandchildren can receive benefits as long as they’re:

  • Unmarried.
  • Under age 18.
  • 18-19 years old and a full-time student (no higher than grade 12).
  • 18 or older and disabled from a disability that started before age 22.

Eligible dependents can be a biological child, adopted child, or stepchild. Benefits end when the dependent reaches age 18 or graduates, except in the case of disability. Dependents can be entitled to benefits up to 50% of what their parents receive. Another advantage is that these payments do not decrease the parents’ retirement benefit.

Apply for survivor benefits

Surviving spouses and ex-spouses may be eligible for another type of Social Security benefit. Survivors can receive a percentage of their partner’s benefits depending on their age and other factors. According to the SSA, surviving spouses can receive:

  • Reduced benefits as early as age 60.
  • Benefits as early as age 50 if they have a disability and that disability started before or within 7 years of your death.
  • Benefits at any age if they are both unmarried and care for a child who is under age 16 or has a disability.

Watch out for tax-bracket creep

Seniors who are still working can accidentally cost themselves if their earnings and Social Security benefits put them in tax trouble. The combination of both wages and benefit payments can bump people up a tax bracket, which will end up costing them compared to the additional money they thought they’d receive. Make sure to compare your potential earnings to the most recent tax brackets – if you’re close, it’s time to evaluate your Social Security options.

Check for mistakes

Even the experts make mistakes. Make sure to review your Social Security statement each year. While most of these statements are accurate, a single mistake can drastically change how much you receive. Even worse, a miscalculation or two can affect your benefit for the rest of your life if left uncaught. By checking your highest-earning years and other numbers, you can save yourself from someone else’s error.

Maximize Your Golden Years

After decades of hard work, it’s important to make sure you get the most of the Social Security benefits you earned. Having those extra funds can help you navigate the complexities of later life, including budgeting for late-life adventures and finding the right senior housing options for your ideal lifestyle.

Are you looking for the right community to spend your retirement years? National Church Residences offers quality senior living options around the country to help you find the right place for your golden years. Use our online community finder to find a retirement community near you.

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