5 Tricks For Stretching Your Social Security Benefits

AAA

The amount of money you receive from Social Security is based on a number of factors, including how much income you earned throughout your working years, the year you were born and the age at which you file for benefits. Many seniors assume that it's inevitable they'll receive a measly payout no matter what, so they go ahead and claim their benefits while the getting's good. But if you play your Social Security cards right, you could end up with bringing home a heck of a lot more dough.

Go Ahead and Procrastinate

Procrastination has earned a bad rap but when it comes to filing for Social Security, dragging your feet can be a good thing. As you probably know by now, you can claim Social Security any time between the ages of 62 and 70; the longer you wait, the fatter your monthly check will be.

If you choose to claim Social Security early, your benefits will be reduced by a fraction of a percent for each month before your full retirement age.

Wait Even Longer

It's hard enough to wait until your full retirement age to file for Social Security but it's even more challenging to put it off until your 70th birthday. However, the reward may be well worth the wait. That's because those who wait until 70 to file for Social Security score a bonus amount. For each year you delay claiming from your full retirement age to the age of 70, your benefit amount will rise by an extra 7-8%. Therefore, if your full retirement age is 66, you could earn up to 32% more if you put off filing until 70.

Get To Work

Many people nearing retirement can't stand the idea of spending an additional year or two in the workforce. However, there are countless financial advantages to working longer. Not only will you bring in more income and beef up your nest egg, but you'll also hike up your Social Security benefits.

Your Social Security payments are calculated by your 35 highest earning years, so if you continue bringing home that higher salary well into your 50s and 60s, you'll essentially nullify some of those low earning years at the start of your career.

Get Married

Husbands and wives have a few extra tricks up their sleeves when it comes to maxing out their Social Security benefits. That's because married folks can choose to receive Social Security benefits based on their own income or they can opt to receive a payout worth 50% of their spouse's benefit. Talk about wedded bliss.

Correct Your Mistakes

Let's say you filed for Social Security at the age of 62, and you're kicking yourself for not waiting longer for the higher benefit. No biggie. Believe it or not, you actually have a second chance. You can simply file Social Security Form 521, and request the withdrawal of your application.

By submitting this form, you're essentially coming out of retirement. Of course, there's a catch: You'll have to pay back all the Social Security benefits you've received thus far.

Conclusion

While these five clever tricks can definitely help you boost your Social Security benefits, it's important to evaluate your unique situation before you put one of these strategies in motion. Discuss your options with a financial professional who can help you create a winning Social Security game plan.
Related Articles
  1. Financial Advisor

    Top Tips for Maximizing Social Security

    Between delaying filing, claiming strategies and taking advantage of special marital benefits, there are several ways to maximize Social Security.
  2. Retirement

    How Social Security Works After Retirement

    Millions of Baby Boomers are looking forward to collecting benefits, but several factors can affect how much they get and whether the money is taxed.
  3. Financial Advisor

    When Taking Social Security Early Can Make Sense

    Sometimes it makes financial sense to take Social Security early. Here's a look at when this might be a good idea.
  4. Financial Advisor

    IRA Holders: How to Avoid this Huge Mistake

    Here's why using your IRA funds to delay taking Social Security benefits may be a good option for more financial security in retirement.
  5. Retirement

    How to Fix an Error on Your Social Security Check

    For many seniors, social security benefits checks are their income stream which means the benefit has to be correct. If you spot an error, you can fix it.
  6. Financial Advisor

    What Will My Social Security Check Look Like?

    It's important to know what your Social Security check will look like in retirement. Here's how you can figure it out.
  7. Retirement

    Can Your 401(k) Impact Your Social Security Benefits?

    Find out why income from a 401(k) does not affect the amount of your Social Security benefits, but how it can impact your annual tax bill if you earn too much.
  8. Retirement

    How Having a Job Affects Social Security Benefits

    Social Security benefits mean a lot to retirees' finances. Having a job, even part-time, can complicate matters if certain benchmarks aren't reached.
  9. Retirement

    Ten Social Security Questions Everyone Asks

    The average American doesn’t know enough about Social Security. Here are answers to 10 of the more common questions people ask about our retirement system.
  10. Financial Advisor

    10 Things You Need to Know About Social Security

    Every saver should know these ten things about Social Security retirement benefits.
Hot Definitions
  1. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  2. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  3. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  4. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  5. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  6. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
Trading Center