Social security

How to maximize social security?

Learn how you can maximize your Social Security benefits and the various strategies you can use.

3 min read

Social Security is an important element of retirement income, with at least 9 out of 10 retired workers depending on Social Security as the main source of retirement income. However, Social Security provides a fixed source of income for retirees, and you should figure out how to boost your benefits.

You can maximize your Social Security benefits by working for at least 35 years and earning the maximum taxable income each year. Once you retire, you can delay taking benefits until the full retirement age to get the full benefit or wait until age 70 to receive increased benefits. Also, if you claimed benefits early, you can suspend the benefits until a later time to receive a higher monthly payment.

Delay your application

While Social Security allows individuals to claim benefits starting from age 62, you won't get the full retirement benefits until you reach the full retirement age. Claiming benefits early will permanently reduce your benefits depending on how long prior to your full retirement age you receive your first check.

If you claim benefits at the full retirement age, you will receive the full benefit. Additionally, if you delay claiming benefits further after the full retirement age, your benefits will increase by 8% for each year you delay claiming benefits until age 70.

Work for at least 35 years

Social Security calculates a worker’s benefits based on their 35-highest earning years. If you worked for at least 35 years, you will have more earnings to replace your low-earning years with higher-earning years to boost your benefits.

For example, if you worked for 40 years, and you earned more in the additional years, these earnings will replace your low-earning years to get your 35 highest earning years. If you worked for less than 35 years, Social Security uses zeros in the calculation for years with no earnings, which can lower the amount of your benefits. If you had breaks in your career, working longer will help you boost your benefit.

Earn more

You can maximize your benefits by earning as much as possible each year. Social Security factors in how much you paid into the system to determine how much benefits you will get. Typically, Social Security takes 6.2% of your salary each year, and your employer matches a similar percentage, up to $160,200 in income in 2023.

If you earn the maximum possible payout each year, which is adjusted each year, you will qualify for the maximum Social Security benefit at your full retirement age. For 2023, the maximum benefit is $2,572 if you retire at 62, $3,506 if you retire at the full retirement age, or $4,555 if you retire at 70.

If you did not earn that much before retirement, you can continue working after retirement to boost your benefits. If your earnings in retirement are higher than what you earned before retirement, these earnings will be factored into your benefits calculation, and you may increase your monthly payouts.

Claim spousal benefits

If your spouse or ex-spouse is eligible for benefits on their work history, you may qualify to receive up to 50% of the spouse's benefit amount at their full retirement age. You could get more from taking a spousal benefit if you are a low-earning or non-working spouse, and your retirement benefits are lower than the spousal benefit. However, the higher-earning spouse must be receiving retirement benefits from Social Security for the low-earning spouse to claim a spousal benefit.

Generally, when you apply for a spousal benefit, you are deemed to have also applied for benefits on your record. Hence, Social Security compares the amount you qualify to get on your record and the spousal benefit amount and awards you the bigger benefit. If your spouse is deceased, Social Security will switch the spousal benefit to survivor benefits, and you could get up to 100% of the deceased spouse's benefit.

Add a minor child

If you are collecting retirement or disability benefits from Social Security, your minor child may be eligible for benefits. Typically, an unmarried minor child may be eligible to receive up to 50% of your benefit. The benefits end at age 18, or 19 if the child is still a secondary school student. If the child is disabled, and the disability started before age 22, they will be eligible to receive Social Security disability benefits. However, there is a family maximum that limits how much the family can collect based on the worker’s earnings.

Suspend your benefit until 70

If you claimed Social Security benefits early and you think it was a mistake, you can choose to suspend your benefits when you reach the full retirement age. When you spend your benefits, you will earn delayed credits at an 8% annual rate for each month your benefits remain suspended. You will be required to fill out Form SSA 521 to suspend your benefits.

Usually, when you request to suspend your benefits, the suspension will take effect in the month after you make the request. You won’t be required to repay any benefits you have received, but suspending your benefits will affect dependents claiming benefits on your record such as spouse (s) and minor child. The dependents must consent to the withdrawal in writing.

You can resume collecting benefits at any time, and you will receive a new higher monthly payment. However, when you attain age 70, Social Security will automatically restart your benefits at the new monthly payment.

Delay benefits until 70

If you have other sources of retirement income other than Social Security like pension and military retirement, you can decide to delay your benefits until 70 to maximize your benefit. Usually, Social Security allows individuals to claim benefits starting from age 62, but you will receive fewer benefits than if you waited until the full retirement age.

If you want to increase your benefit check, you can delay your benefits after reaching the full retirement age until age 70. You will earn an 8% annual rate in delayed credits for each year you delay benefits after the full retirement age. Apart from the delayed credits, you will also benefit from the cost of living adjustment to increase your monthly payout. However, you won't get any delayed credits when you delay benefits beyond age 70.

Check your Social Security statement

If you are retired or approaching retirement, you will receive a personalized Social Security statement every year. The statement details your estimated monthly benefits, dependent benefits, and your yearly earnings record. Once you receive your statement, you should check the numbers for any errors such as omissions and income understatement. If there are errors in your statement, you should notify the Social Security Administration to correct the errors.