Ways to Make the Most of your Social Security Benefits

Ways to Make the Most of your Social Security Benefits

June 15, 2022

While there are no "hard and fast rules" about the proper age to draw Social Security, there are several variables to consider for increasing your future benefits. And there are also your own personal circumstances to consider when making the decision on when to claim.

We use software from one of the leading Social Security consulting firms to model our clients’ specific situations: their work history and plans for future earnings, age and marital status, other resources beyond Social Security for covering their expenses during their nonworking years, health status, and clients’ general outlook on the economy and their longevity. It’s a big decision and a lot goes into making the right decision for each individual.

There are also different ways to increase your own future benefits and we describe a few below:

  1. Waiting for a later age.

Each year you delay your benefits under full retirement age (66 or 67 depending on birth year), your benefit increases anywhere from 5 to 7% higher. If you continue to delay past full retirement age, the increase is about 8% annually up to age 70.

  1. Working longer.

Social Security uses your 35 highest years of earnings to calculate the benefit. If you continue to work and delay collecting your benefits, every additional year replaces years of zero earnings or of lower wages. Those who continue working at their highest earnings until full retirement age should see a significant benefit increase.

  1. Stopping and Suspending.

If you begin collecting Social Security before you reached your full retirement age, and no longer need/want the early payments, you can stop them within 12 months of when they began (called a withdrawal of benefits or “do over”). You are required to pay back what has been paid but may avoid the permanent age reduction. 

If you have reached full retirement age, are collecting Social Security and would like a chance to increase the monthly amount, you may suspend the benefits. For each full year of suspended benefits, the amount will increase 8% higher until age 70, giving a higher monthly payment when resumed. 

  1. Apply for spousal benefits first (current, ex, widow’s) and delay your own.

 If you start collecting Social Security benefits at full retirement age as a spouse first, you can delay collecting your own earned benefit, and it will earn delayed retirement credits growing larger (called filing a restricted application for those born before 1/2/1954).

However, if you were born 1/2/54 and after, you may only file on your spouse’s record first if it is a widow(er)’s benefit, or you receive spousal benefits because you are caring for a child under age 16 or disabled.

  1. Claim benefits while caring for eligible dependents.

 When you claim Social Security and list eligible family members (e.g., spouse, ex-spouse, children), Social Security pays “family” benefits for each eligible individual, in addition to your benefit, until they lose eligibility.

When discussing with our clients when to claim, we’ll integrate the results from Social Security benefit options into the bigger financial planning projections to see how each of these decisions plays out in your “big picture” over your lifetime(s). Social Security benefit decisions are one of the biggest financial decisions our clients make, and we are here to help you make the most of your options.

If you have reached full retirement age, are collecting Social Security and would like a chance to increase the monthly amount, you may suspend the benefits. For each full year of suspended benefits, the amount will increase 8% higher until age 70, giving a higher monthly payment when resumed.