20 Strategies to Maximize Your Social Security Benefits
Unlock the secrets to maximizing your Social Security benefits with smart strategies that can put more money in your pocket for a secure and stress-free retirement!
- Alyana Aguja
- 6 min read
To get the most out of your Social Security benefits, you need clever timing, wise planning, and a clear understanding of the system’s rules. From postponing your claim to receive higher payments to tapping spousal and survivor benefits, the right strategy can pay huge dividends for your lifetime earnings. By being smart about it, you can have a better financial future and enjoy a more secure retirement.
1. Delay Claiming Until Age 70
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Each year you postpone claiming after your full retirement age (FRA), your benefits rise roughly 8% until age 70. The delayed retirement credit can increase your monthly payment substantially for the rest of your life. If possible, this is one of the best strategies to optimize your Social Security.
2. Know Your Full Retirement Age (FRA)
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Your FRA is based on your year of birth, between 66 and 67 for most individuals today. Taking it earlier means permanent lower benefits, whereas taking it at FRA means you receive 100% of what you’re entitled to. Knowing this figure enables you to map out your optimal claiming strategy.
3. Maximize Your 35 Highest-Earning Years
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Social Security figures your benefit from your 35 highest-paying years. If you have fewer than 35 years of work history, years of zero income are included, reducing your benefit. If you can, try working a few additional years to fill in low-paying years with more productive ones.
4. Work at Least 10 Years to Qualify
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You must have a minimum of 40 work credits (usually acquired within 10 years) to receive Social Security benefits. Without them, you won’t get any retirement pay. If you fall short, working extra years to meet the requirement is necessary.
5. Think About Spousal Benefits
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If you’re married, you can receive a spousal benefit of up to 50% of your spouse’s FRA benefit. This is particularly helpful if your individual benefit is less than what you’d get as a spouse. Even divorced people (married for 10 years or more and now unmarried) can receive this.
6. Take Advantage of Survivor Benefits
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If your spouse dies, you could be eligible for survivor benefits of up to 100% of their benefit. This can make a big difference in financial security, particularly if their earnings record is better. Timing and eligibility rules exist, so it makes sense to plan ahead.
7. Employ the “File and Suspend” Strategy (if Eligible)
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Although limited by law amendments in 2016, a few older couples are still eligible for this tactic. It enables a higher-income spouse to claim benefits and then suspend them, allowing the other spouse to claim spousal benefits while their own benefits accrue. If qualified, this can be an intelligent means of maximizing family income.
8. Claim Divorced Spousal Benefits
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If you were married for 10 or more years, divorced, and still unmarried, you may collect benefits based on your ex-spouse’s earnings record. This does not reduce their benefits and can be a significant source of income. Having an idea of your rights will assist you in making the right choice.
9. Coordinate With Your Spouse for Maximum Benefits
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Married couples can plan when each takes benefits to maximize their lifetime benefits. For instance, one can take early while the other waits until age 70. This creates a constant income while maximizing future payments.
10. Keep Working If Possible
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Working and taking Social Security can increase your benefits if you substitute lower-income years with higher-earning ones. However, if you take benefits before FRA, earnings over a specified amount ($22,320 in 2024) will lower your benefits temporarily. After you reach FRA, earnings no longer lower your payments.
11. Reduce Taxes on Your Benefits
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As much as 85% of your Social Security benefits may be subject to taxation if you earn over a set amount. Reducing taxable income via tactics such as Roth conversions or tax-effective withdrawals can minimize this requirement. Effective tax planning saves you more of your benefits.
12. Take Advantage of Delayed Retirement Credits
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For each year you delay taking Social Security after FRA, your benefit is raised by 8% up to age 70. This adds to a much larger check for the remainder of your lifetime. If you anticipate living a long life, this tactic proves to be worthwhile.
13. Be Cautious of the Earnings Test if You Take It Early
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If you apply before FRA and continue working, earnings over a specific amount ($22,320 in 2024) can cut your benefits temporarily. For each $2 earned over the amount, $1 is deducted from your benefits. After you reach FRA, withheld benefits are returned gradually.
14. Think About Claiming Benefits for Dependent Children
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If you have dependent children under age 18 (or 19 if in high school) when you retire, they could receive benefits based on your earnings record. Such benefits can be a major addition to family income. This is a wonderful option for parents in the latter years of their careers.
15. Understand How Government Pensions Impact Benefits
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If you held a job that did not contribute to Social Security, such as some government jobs, the Windfall Elimination Provision (WEP) or Government Pension Offset (GPO) can lower your benefits. Knowing these regulations aids you in planning in advance. Verifying whether they affect you can avoid bitter surprises.
16. Use a Social Security Calculator to Maximize Timing
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Free online calculators and expert financial planners can assist in reviewing your situation. They consider your health, work record, and marital status to recommend the optimum claiming strategy. A small amount of planning today can mean thousands extra in lifetime benefits.
17. Don’t Assume Social Security Alone Is Enough
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Social Security was never meant to replace your full income in retirement—only about 40% for the average worker. Supplementing it with personal savings, 401(k)s, and IRAs ensures a more comfortable retirement. A diversified income strategy is key to financial security.
18. Revisit Your Strategy if Your Life Situation Changes
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Marriage, divorce, widowhood, or changes in health can all affect your best Social Security strategy. Regularly reviewing your plan ensures you’re maximizing benefits based on your current circumstances. Flexibility is key to getting the most out of the system.
19. Know When to Switch Between Different Benefits
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In a few instances, you will be entitled to several benefits—such as spousal, survivor, and yours. Knowing how to switch back and forth (e.g., beginning with survivor benefits and converting to your own at age 70) will maximize your lifetime payments. Properly timed switches can make you more money in the end.
20. Speak to a Financial Expert
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Social Security is complicated; minor errors can mean thousands of dollars in lost benefits. A financial planner or Social Security representative can guide you through the regulations and optimize your payments. Proper guidance helps you receive every dollar to which you are entitled.