Understand the Basics of Social Security

Before you can maximize your benefits, it’s important to understand the basics of how Social Security works. The amount you receive is based on your earnings history and the age at which you start collecting benefits. The more you earn and the longer you work, the higher your benefits will generally be.

• Primary Insurance Amount (PIA): This is the amount you would receive if you begin taking Social Security at your full retirement age (FRA).
• Full Retirement Age (FRA): FRA varies depending on your birth year. For example, if you were born in 1960 or later, your FRA is 67.

Delay Your Claiming Age

One of the most effective ways to maximize your Social Security benefits is by delaying your claim. While you can begin receiving benefits as early as age 62, the longer you wait, the higher your monthly payment will be. Here’s how delaying your claim helps:

• Increase Your Monthly Benefit: If you wait until your full retirement age (FRA) to claim benefits, you will receive your PIA. However, if you delay benefits until after your FRA, your monthly benefit will increase by about 8% per year until you reach age 70. This could result in a significant increase in your monthly payments.
• Delayed Retirement Credits: For every year you delay claiming beyond your FRA, you earn delayed retirement credits which can boost your benefits up to a maximum of 132% of your PIA by age 70.

Work Longer and Maximize Your Earnings

Your Social Security benefit is based on your highest 35 years of earnings. If you have low-earning years or periods when you weren’t working, those years will be factored into your benefit amount. By working longer and earning more, you can replace low-earning years with higher-earning ones.

• Earning More: If you’re still working, focus on maximizing your earnings before claiming benefits. The higher your lifetime earnings, the higher your Social Security benefits will be.
• Consider Your Career Path: Aim to increase your earnings in the years leading up to retirement by improving your skills, taking on new opportunities, or working in higher-paying positions.

Be Mindful of Your Spouse's Benefits

If you are married, you can increase your total household benefits by coordinating your Social Security strategies with your spouse. Here are a few ways to maximize benefits for both of you:

• Spousal Benefits: If your spouse has a higher income and will be receiving a larger benefit, you can claim spousal benefits. You can receive up to 50% of your spouse’s full benefit amount if you are eligible and meet the SSA’s requirements.
• Survivor Benefits: If your spouse passes away, you may be eligible to receive survivor benefits. If your spouse’s benefit is higher than yours, you can switch to their benefit after their death, which could increase your payments.

Consider Taxes and Other Income Sources

When maximizing your Social Security benefits, it’s important to understand how your benefits may be taxed and how other sources of income can affect your benefits.

• Taxes on Social Security: Depending on your income level, your Social Security benefits may be taxable. Up to 85% of your Social Security income may be subject to tax if your total income exceeds certain thresholds.
• Other Sources of Income: If you plan to continue working while receiving Social Security or have other sources of income, keep in mind that earnings above a certain threshold may reduce your Social Security payments if you are under your full retirement age.

Take Advantage of Social Security Strategies for Divorced Individuals

If you are divorced and were married for at least 10 years, you may be eligible for benefits based on your ex-spouse’s earnings. Here’s how to maximize your benefits as a divorced individual:

• Spousal Benefits: You can claim up to 50% of your ex-spouse’s full retirement benefit if you meet the eligibility requirements.
• Divorced Survivor Benefits: If your ex-spouse passes away, you may be eligible to receive survivor benefits based on their work record, which may be higher than your own benefit amount.

Consider Your Social Security Statement

The Social Security Statement provides a personalized summary of your earnings history and the estimated benefits you will receive at different ages. Review this statement regularly to ensure your earnings are accurately recorded and to assess your future benefit amounts. You can access your Social Security Statement online by creating an account at www.ssa.gov/myaccount.