You’ve been contributing to the Social Security fund over a lifetime of work, so you might as well make the most of your benefits. Here are nine ways you may be able to boost your retirement benefits.
- Delay applying until age 70 and you’ll get your maximum amount.
- Wait even longer and you could be eligible for delayed retirement credits.
- If you work while getting benefits, make sure you don’t run into the earned-income limits that will reduce your benefits.
- If eligible, don’t overlook spousal, dependent, or survivor benefits.
Strategies to Boost Your Benefits
There are steps that you can take that will go a long way toward helping you maximize your Social Security retirement benefits. You can use a combination of some of the following strategies, some of which have eligibility requirements:
- Work 35 years
- Wait until at least full retirement age to start collecting
- Collect spousal benefits
- Receive dependent benefits
- Keep track of your earnings
- Watch out for tax bracket creep if you’re still working
- Apply for survivor benefits
- Check Social Security statement for mistakes
- Stop collecting benefits temporarily
Let's take a look at each in more detail.
1. Work 35 Years
You can be eligible for Social Security benefits after working as little as 10 years, and you can begin receiving benefits as early as age 62 or as late as age 70. Your benefit amount is based on the average of your 35 highest-earning years. If you work for fewer years, those zeros are averaged in.
As your benefit is based on your highest-earning years, the more you earn, the higher your benefit. There are limits, though. The maximum benefits for 2021 are $2,324 for those retiring at age 62, $3,113 for those retiring at the full retirement age of 66, and $3,895 for those retiring at age 70.
2. Wait Until at Least Full Retirement Age
As you can see from the maximum levels above, you can retire as young as 62 and collect Social Security, but your benefits will be reduced by 25% to 30%. For everyone born after 1942, the full retirement age is 66, with two months added for each year after 1954. For those born in 1960 and after, it is age 67.
It’s wise to wait until the full retirement age to start collecting in order to get the highest amount you’re eligible to receive. Even better, wait even longer and you could be eligible for delayed retirement credits that increase your monthly payment.
If you wait until you're 70 instead of 62 to collect benefits, you'll get an extra 8% a year. Once you reach 70 the increases stop.
3. Sign Up for Spousal Benefits
If you are married and have little earned income, you may be entitled to spousal benefits of up to 50% of your partner’s eligible amount. If you’re at least 62 years old and have a child in your care, you may be eligible to receive benefits through your spouse. The spousal benefit can be as much as 50% of the amount of the partner’s benefit, depending on when the partner retires.
Even divorcees are eligible. In fact, both parties in a divorce can claim spousal benefits based on the other spouse’s Social Security earnings. However, if you have remarried, you cannot collect your ex-spouse’s benefits.
4. Receive a Dependent Benefit
If you are retired but still have dependents under age 19, they are entitled to up to 50% of your benefit. This dependent benefit doesn’t decrease the amount of Social Security benefits that a parent can receive. They are added to what the family receives.
5. Monitor Your Earnings
If you continue to work after you start receiving Social Security payments, keep track of your earnings to make sure they don’t exceed the allowed limit. For 2021, the limit on earned income is $18,960 for recipients below full retirement age and $50,520 in the year when you reach full retirement age. Your benefit payment is reduced for the year if you exceed the limits. After that, however, there is no penalty for earned income at any level.
6. Avoid a Tax Bracket Bump
If you’re still working while receiving benefits, you also have to watch out for tax bracket creep. Your earnings plus Social Security could put you up a notch in the tax table.
7. Apply for Survivor Benefits
If your deceased spouse (or ex-spouse) was eligible for a higher Social Security payment than you are, you may be eligible for that higher survivor benefit. You may qualify for the higher benefit even if your spouse died before applying for benefits.
If you begin to collect Social Security benefits before you reach normal retirement age, not only will you receive a reduced benefit, but after your death, your surviving spouse will, too.
8. Check for Mistakes
You get a Social Security statement every year. Do not assume it is accurate. Check the numbers and report any errors to the Social Security Administration. Remember, your benefits are based on the average of your 35 highest-earning years. A miscalculation for even one or two of those years could impact your benefit for the rest of your life.
9. Change Your Mind
You may have the right to suspend your benefit, pay back the money you’ve already received, and start collecting benefits again later. You can do this as long as you’ve been receiving benefits for less than a full year.
This could happen if you get a job after you retire or inherit money and decide you can afford to delay filing to get a higher benefit check. You do this by filing Social Security Administration Form 521, Request for Withdrawal of Application. When you file again later, your benefit should be substantially higher.
The Bottom Line
Social Security benefits are a crucial part of retirement planning. You may be entitled to more than you think. Implementing a combination of some of the above strategies can help you boost your monthly check once you start claiming retirement benefits.