Maximizing Your Social Security: Strategies to Get the Most Out of Your Benefits

 

Social Security is more than just a monthly check—it’s a crucial part of retirement planning. But are you actually maximizing what you’re entitled to? Many people leave money on the table simply because they don’t know the right strategies. The good news? With some planning and smart decisions, you can increase your benefits and make the most of what Social Security offers. Whether you’re nearing retirement or just starting to think about it, these strategies will help you secure a stronger financial future.

Understanding How Social Security Works

Before jumping into social security retirement strategies, it’s important to understand the basics. Social Security benefits are calculated based on your 35 highest-earning years. The longer you work and the more you earn, the higher your benefit will be. But your age when you start collecting also plays a huge role. The earlier you claim, the lower your monthly check. On the flip side, waiting can mean a much bigger payout in the long run.

Now, let’s talk about how to make the system work in your favor.

1. Delay Claiming for a Bigger Payout

The single most effective way to maximize Social Security is to wait before claiming benefits. While you can start as early as 62, your monthly check will be permanently reduced. Full retirement age (FRA) varies depending on when you were born, but if you wait until 70, your benefits increase significantly.

For every year you delay past FRA, your benefits grow by about 8%. That means if your full benefit at 67 is $2,000 per month, waiting until 70 could boost it to around $2,480. Over the course of retirement, that difference adds up fast.

2. Keep Working (Even a Few More Years Helps)

Your benefits are based on your 35 highest-earning years. If you don’t have 35 years of work history, those missing years count as $0, which drags down your average. Even if you’ve worked 35+ years, replacing lower-earning years with higher-income years before retiring can increase your benefit.

Even part-time work can help. If you’re earning more now than you did early in your career, each additional year can push up your future Social Security checks.

3. Coordinate With Your Spouse

Married couples have extra strategies to consider. Spousal benefits allow one spouse to claim up to 50% of the other’s benefit at FRA. This is useful if one spouse earned significantly less than the other.

Survivor benefits are also key. When one spouse passes away, the surviving spouse can claim the higher of the two benefits. That’s why it often makes sense for the higher earner to delay claiming. A larger benefit means a larger survivor benefit in the future.

4. Be Smart About Taxes

Yes, Social Security can be taxed. If you have additional income from work, pensions, or investments, up to 85% of your benefits could be taxable.

One way to lower taxes? Carefully structure withdrawals from retirement accounts. If you can live off tax-free income from Roth accounts or other sources, you may be able to keep more of your Social Security tax-free. Working with a financial planner can help you develop a strategy to minimize tax burdens.

5. Consider the Impact of Early Retirement

Retiring early may sound appealing, but it comes with trade-offs. If you claim Social Security before your FRA and continue working, your benefits could be temporarily reduced due to the earnings limit. In 2024, for example, if you earn over $22,320 while collecting early benefits, Social Security will withhold $1 for every $2 you earn above that limit.

Once you reach FRA, those withheld benefits are recalculated and added back, but claiming early still means locking in a lower monthly payment for life.

6. Take Advantage of Restricted Applications (If Eligible)

This won’t apply to everyone, but if you were born before January 2, 1954, you might still be able to use a restricted application strategy. This allows you to claim spousal benefits first while letting your own benefit grow until age 70. Unfortunately, this strategy isn’t available to younger individuals, as it was phased out under recent Social Security changes.

7. Plan for Longevity

People are living longer than ever. While you might not think you’ll live to 90, planning for a long retirement is smart. Running out of money in your later years is a far bigger problem than delaying benefits for a few extra years. If you’re healthy and have other sources of income, waiting to claim Social Security is often the safest bet for long-term financial security.

8. Don’t Forget About Dependent and Disability Benefits

Social Security isn’t just for retirees. If you have dependents under 18, they may be eligible for benefits based on your work record. Likewise, if you develop a disability before reaching retirement age, you might qualify for Social Security Disability Insurance (SSDI), which can help bridge the gap until you reach full retirement.

9. Monitor Your Social Security Record Regularly

Mistakes happen, and an error on your Social Security record could cost you money. Create an account on the Social Security Administration’s website and check your earnings history regularly. If there’s a missing year or incorrect earnings, fixing it now can prevent issues down the road.

10. Work With a Professional

Social Security is complex, and the best strategy isn’t the same for everyone. Consulting with a financial planner or Social Security expert can help you create a personalized plan based on your income, health, and retirement goals.

Making Every Dollar Count

Social Security is a key piece of your retirement plan, and a few smart moves can make a huge difference in how much you receive. By delaying benefits, maximizing your earning years, coordinating with a spouse, and managing taxes, you can set yourself up for a more comfortable retirement. The key is to plan ahead, stay informed, and make decisions that align with your long-term goals. Every dollar counts, so make sure you’re getting the most out of the benefits you’ve earned.