10 Social Security Secrets That Could Boost Your Benefits
Did you know that there are Social Security secrets that could increase your benefits? These secrets are not complicated, and anyone can take advantage of them by investing a little effort and a little time.
Social Security Secrets to Live By
The list starts with the basic tenets of Social Security, then it dives deeper into some of the little-known benefit-boosting secrets of the system. These are 11 tips to live by for sure. (For more, see Introduction to Social Security.)
1. Work 35 Years
Although you can receive Social Security benefits after working as little as 10 years, your benefit is based on the average of your 35 highest-earning years. If you work fewer than 35 years, a lot of zeros are averaged in. Moreover, as your benefit is based on averaging your highest-earning years, the more you earn, the higher the benefit. Ask for a raise or get a second job to raise your average even more.
2. Work Longer
You can retire as young as age 62. If you do, though, your benefits will be reduced by 25% to 30%. Full retirement for those born after 1942 happens at 66, with two months added for each year after 1954; for those born in 1960 and after, it is 67. You should try to work long enough to qualify for full retirement benefits. Even better, your benefit will be 132% higher if you delay retirement until reaching 70. So if you do quit working at 66 or 67, you may still want to delay filing for benefits until 70 if you can swing it financially.
3. Receive Half of a Spouse’s Benefit
You are entitled to 50% of a spouse’s or ex-spouse’s benefit, provided you and your ex were married for at least 10 years. People often overlook this important Social Security filing secret, including the fact that 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. (For more, see How does my spousal Social Security benefit work?)
4. Receive a Spousal Benefit While Working
Another option, if both spouses earn about the same amount and one retires, gets Social Security benefits and is at full retirement age: If the other spouse has reached full retirement age (and was born before Jan 2, 1954), he or she can claim spousal benefits by filing a "restricted application" and keep working. Once that second spouse decides to retire, it’s time to apply for his or her own higher benefit. Younger spouses no longer qualify for this benefit, which was eliminated under a 2015 budget act. (How to Navigate Spousal Benefits Under New Social Security Rules explains the details.)
5. Receive a Dependent Benefit
If you are retired but have dependents under age 19, they are entitled to up to 50% of your benefit. This could happen, for example, if you are widowed or divorced and remarry someone younger with children. (For more, see A Guide to Social Security Dependent Benefits.)
6. Monitor Earnings
If you do decide to retire before full retirement age, track any earnings you have and make sure that they don’t exceed the allowed limit. If they do, you may end up having a portion of future benefits withheld until you do reach full retirement.
7. Avoid a Tax-Bracket Bump
Another area to watch is the effect of your non–Social Security earnings on income taxes. Additional earnings could put you in the next highest tax bracket.
8. Apply for Survivor Benefits
You can receive a deceased spouse (or ex-spouse)’s benefit if you are age 60 or older and your survivor benefits are higher than your own benefits would be (you have to wait until your own full retirement age to get 100% of his or her benefit). Even if your deceased spouse died before filing, you could get up to 100% of his or her benefit. If you are at least 60, remarriage won't make you lose these benefits. Once you reach age 70, check to see if your own delayed benefit is higher, and, if so, switch. (For more, see How do Social Security survivor benefits work?)
9. Check for Mistakes
You will receive a Social Security statement every year. Do not assume it is accurate. Check it and report any errors using information in this document. 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.
10. Ask for a Do-Over
You may have the right to halt your benefit, pay it back and start collecting benefits again later. This could apply if you become re-employed after you retire – or inherit money and decide you can afford to delay your filing in order to have a higher benefit check. You do this by filing Social Security Administration Form 521, Request for Withdrawal of Application – but note that you only have 12 months after starting benefits to change your mind (click here for details).
When you file again later, your benefit will likely be substantially more than it was originally. Finally, you can claim an itemized deduction or a tax credit for any taxes you paid on benefits in previous years.
The Bottom Line
Using some of these secrets as part of your Social Security filing strategy forces you to ask yourself one serious question: “How long do I think I will live?” It makes most sense to delay filing until age 70 – but not if your personal life expectancy is fairly short. The latest government statistics suggest a man who is still alive at 65 can expect to live almost to the age of 83. A woman still alive at 65 will likely live to nearly 85.5 years. Other secrets are not dependent on age but simply provide you with additional options for increasing your benefits based on life circumstances and marital status.
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