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. Retirement

    Overhaul Social Security to Fix Retirement Shortfall

    There are several theories and ideas about how we can make up for the $6.6 trillion retirement savings shortfall in America. Adjustments to Social Security and our retirement savings plans are ...
  2. Investing News

    How Does US Social Security Measure Up Abroad?

    Social Security is a hotly debated topic. After examining the retirement plans of three different countries, the U.S.'s does not come out the winner.
  3. Professionals

    Social Security 'Start, Stop, Start' Explained

    The start, stop, start Social Security strategy is complicated. Here's what retirees considering it need to consider.
  4. Professionals

    Top Social Security Issues for Divorced Women

    What female divorcees need to know about the twists and turns of figuring out Social Security benefits.
  5. Professionals

    Top Retirement Prep Questions to Ask Clients

    Is your client really ready for retirement? Here are some essential questions to ask.
  6. Economics

    The Economics of Raising the Social Security Age

    Briefly examine the economics behind raising the retirement age for Social Security benefits and how it could impact the federal budget.
  7. Retirement

    Top Tips for Minimizing Taxes on Social Security

    Social Security benefits are taxable under certain circumstances. Here are some ways retirees can lessen the tax burden.
  8. Professionals

    Advisors: Tap Peers for 'Second Opinions'

    When it comes to knowledge, more is better. And everybody wins when advisors seek second or third opinions for their clients from colleagues and peers.
  9. Taxes

    Employers: Don't Forget IRS Form 941

    Your obligations as an employer include various employment taxes. Use this form to report them.
  10. Retirement

    These Are the Top Jobs for Retirees

    Learn some of the best jobs available for retirees who want to stay busy. These include retail, driving, call center work and tutoring.

You May Also Like

Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!