5 Social Security Tips for 2019 -- and Beyond

If you don't have a big, fat pension income coming to you in retirement, you'd better be sure you're very familiar with Social Security and know how to get the most out of the program.

Here are five critical things you should know about Social Security. Getting them under your belt will help you not leave valuable retirement income on the table.

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No. 1: Set up a My Social Security account

First things first. If you haven't already done so, head over to the Social Security Administration (SSA) website and set up a my Social Security account. Doing so will let you access a good estimate of how much income you can expect to receive from Social Security, based on your earnings history, so far. You'll also be able to see the SSA's record of your earnings for your entire working life. That's handy, because if there are any errors in it, you may end up with smaller benefit checks than you have actually earned. With a my Social Security account, you can correct errors, request a replacement Social Security card (if you meet certain criteria), and take care of other Social Security business. Better still, setting up an account can also prevent identity theft and headaches -- as some scammers out there have been setting up accounts in the names of people who haven't yet done so, aiming to collect their benefits.

No. 2: Understand how your benefits are calculated -- and how to boost them

It's also valuable to understand how your benefits are calculated, as you have some control over some of the numbers that go into the formula. (Indeed, there are a bunch of ways that you can increase your Social Security benefits.) For starters, know that the formula incorporates how much you earned in the 35 years in which you earned the most (adjusted for inflation). So if you only earned income in 30 years, the formula will be incorporating five zeros, which leaves you with less in benefits.

It's also helpful to have those earnings be as high as possible, so that's one more reason to consider asking for a raise or applying for higher-paying jobs. If you're currently earning much more than you have in the past (on an inflation-adjusted basis), even if you've already worked 35 years, you might consider working for another year or two, as each high-earning year will kick a low-earning year out of the calculation, beefing up your benefits. Remember -- it's your 35 highest-earning incomes that are used in the calculation.

No. 3: Know your full retirement age

Next, if you want to be able to make informed decisions about your Social Security benefits, you'll need to know your "full retirement age." That's the age at which you're entitled to start receiving your full Social Security benefits. That age used to be 65, but for most of us these days it's 66 or 67 or somewhere in between. You can find your own full retirement age in the table below:

Birth Year Full Retirement Age
1937 or earlier 65
1938 65 and 2 months
1939 65 and 4 months
1940 65 and 6 months
1941 65 and 8 months
1942 65 and 10 months
1943-1954 66
1955 66 and 2 months
1956 66 and 4 months
1957 66 and 6 months
1958 66 and 8 months
1959 66 and 10 months
1960 and later 67

Data source: Social Security Administration. 

No. 4: Think about when you want to start collecting benefits

Once you know your full retirement age, you can start thinking about when you will start collecting your benefits. You can start as early as age 62 and as late as age 70. For every year beyond your full retirement age that you delay starting to receive benefits, you'll increase their value by about 8% -- until age 70. Delay from age 67 to 70, and you can end up with checks about 24% fatter -- enough to turn a $2,000 check into a $2,480 one. Of course, if you start collecting early, your benefit checks will be smaller -- but that's not as bad as it sounds, and starting to collect early makes plenty of sense for many people. Remember that thought your checks will be smaller, you'll get many more of them.

To help you see the effect of starting to collect early or late, the table below shows the approximate percentage of your full Social Security benefits that you'll get if you start collecting at various ages. So if your full retirement age is 67 and you start collecting at, say, age 64, you'll receive 80% of the amount you'd have gotten if you started at 67.

Birth Year Full Retirement Age Start Collecting At: Full Retirement Age of 66  Full Retirement Age of 67 
1937 or earlier 65 62 75% 70%
1938 65 and 2 months 63 80% 75%
1939 65 and 4 months 64 86.7% 80%
1940 65 and 6 months 65 93.3% 86.7%
1941 65 and 8 months 66 100% 93.3%
1942 65 and 10 months 67 108% 100%
1943-1954 66 68 116% 108%
1955 66 and 2 months 69 124% 116%
1956 66 and 4 months 70 132% 124%
1957 66 and 6 months
1958 66 and 8 months
1959 66 and 10 months
1960 and later 67

Data source: Social Security Administration. 

If you're married, be sure to coordinate your Social Security benefit-collecting plans, as there are some strategies that can help you get more, on average, over the long run.

No. 5: Know how much income you can expect

Finally, be sure to regularly review how much income you can expect to collect from Social Security, as it's an important factor for your retirement planning. If, for example, you know that you will want $65,000 annually in retirement and you expect to collect $25,000 from Social Security, you'll know that you need to come up with the rest -- $40,000 annually. (That might come from dividends, annuities, a pension, other investments, or a combination of sources.)

For context, know that the average monthly retirement benefit check was recently $1,470 -- or about $17,600 per year. If you've long been an above-average earner, though, you'll collect more than that -- and vice versa. For 2019, the maximum benefit for those retiring at their full retirement age is $2,861 and the maximum for those who wait until age 70 is $3,770. Those two monthly sums respectively amount to about $34,000 and $45,000 annually.

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