3 Secrets to Maximizing Your Social Security

When it comes to retirement planning, Social Security is one of the most important—and often misunderstood—sources of income. While most people know they’re entitled to benefits, few realize just how much the timing and strategy behind their claim can impact their monthly checks for life. The truth is, a few smart moves can mean the difference between just getting by and enjoying a comfortable retirement.

In this post, we’ll reveal three powerful secrets that can help you unlock the full potential of your Social Security benefits—and keep more money in your pocket for the years ahead.

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3 Secrets to Maximizing Your Social Security

While this article will not cover every possible scenario (it would take an entire book to do so), it will provide you 3 secrets to maximizing your Social Security. Discovering and applying these secrets can enable you to max-out your social security benefits.

Secret 1: Patience Pays

In most cases, the earliest one can draw Social Security is age 62. (This article assumes the reader has worked enough quarters [40] to draw social security. See this.) A number of people apply for Social Security as soon as they are eligible. Some wait until age 65 to draw, while others wait until their full retirement age (66 for those born in 1954, gradually rising to 67 for those born in 1960 or later) so their income does not affect their Social Security benefits. However, if you truly want to maximize your Social Security benefits, consider waiting until age 70. Why?

Drawing your Social Security at the full retirement age will allow you to make an unlimited income without affecting your Social Security benefits. However, waiting till age 70 will maximize your Social Security benefits.

Each year you wait until drawing your Social Security benefits (up till age 70) will add 8% more to your benefits plus cost of living adjustments. At 8% per year growth, waiting till age 70, instead of drawing at age 65, will add 40% more to your Social Security benefits! So, if you don’t absolutely need your Social Security money immediately, consider waiting. Each year you wait, you are giving yourself a raise that will last for the rest of your life.

Secret 2: Work for 35 Years

Social Security benefits are based on your last 35 years of work history. If your work history is less than that, it will result in lower Social Security benefits. For example, if you only worked 30 years, you would have five years of $0 to average in with the rest of your earnings.

Since your benefits are based on the last 35 years you work, working more than that can increase your benefits. This is true because many people earn more in their latter years than when they first start out. You may want to factor this into your retirement planning. For example, if you are considering retirement at age 65, but you are at the peak of your earnings, working two or three more years may very well boost your Social Security benefits.

Secret 3: Consider Claiming Spousal Benefits

For those married and born before January 2, 1954, they may file a “restricted application” in which they are choosing not to collect their own benefits but their spouse’s benefits. They may switch back to applying for their own benefits at any time. The best way to maximize this approach is for both parties to wait until age 70 to draw benefits.

Married people born after January 2, 1954 may still be eligible for spousal benefits. However, in this case, they must apply for both their benefits and for their spouse’s benefits at the same time. (This is called “deemed” filing.) In this situation, you will collect the higher of the two benefit amounts. (Deemed filing does not apply if you receive spousal benefits and are entitled to disability benefits.)

So, if you want to maximize your Social Security retirement benefits, consider these “secrets.” Wise application of these will give you greater benefits for a lifetime.

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John Claeys

John Claeys is the Founder of Claeys Group Insurance Services, as well as a frequent contributor to the Medicare Blog. John lives with his wife of 30 years in Tyler, Texas. Unsure about Medicare coverage options in East Texas? Contact John for guidance and help navigating the Medicare coverage process.