Social Security: 7 Smart Ways to Get More Benefits
Social Security is likely to be a more critical contributor to your retirement security than you think. According to the Social Security Administration (SSA), 21% of married elderly Social Security beneficiaries and 44% of unmarried ones get fully 90% or more of their income from the program, while 48% of married elderly Social Security beneficiaries and 69% of unmarried ones get 50% or more of their income from it.
Even if you get only a quarter of your retirement income from Social Security, you're going to want to get as many dollars from the program as you can. Fortunately, there are a number of ways to increase your benefits.
Here's a look at seven ways to increase your Social Security benefits.
No. 1: Know how much income you can expect
Let's start by getting some context. Find out what you can expect to collect -- just in case it seems like enough. Or so that you can see how much more income you're going to want to set up for yourself. At SSA.gov , you can set up a "my Social Security" account and look up the SSA's record of your income and taxes paid into the Social Security system anytime -- and you can also see estimates of your future benefits. It's worth clicking in now and then to make sure that your earnings and taxes paid are correct. If they're not, you might end up receiving smaller benefit checks than you've actually earned. Simply by correcting them, you can get increased benefits.
No. 2: Know your full retirement age
You can start collecting the full benefits to which you're entitled at your "full" retirement age, and it's important to know that age because it's likely to be a key part of any Social Security strategizing you may do. The full retirement age used to be 65 for everyone, but it's now 66 or 67 or somewhere in between for most folks:
Full Retirement Age
1937 or earlier
65 and 2 months
65 and 4 months
65 and 6 months
65 and 8 months
65 and 10 months
66 and 2 months
66 and 4 months
66 and 6 months
66 and 8 months
66 and 10 months
1960 and later
Data source: Social Security Administration.
No. 3: Start collecting your benefits late -- or early
Here's a key reason why your full retirement age matters: If you start collecting your benefits late, and you can start as late as age 70, your benefits will be larger. For every year beyond your full retirement age that you delay, they will grow by about 8%. So delay from age 67 to 70 and you can get checks that are about 24% fatter.
Meanwhile, if you start collecting your benefits early, and most of us can start as early as age 62, your benefits will be smaller. They can get up to 30% smaller, in fact.
This handy table shows what percentage of your full benefits you'll get depending on when you start collecting.
Clearly, then, you can increase your benefits by delaying starting to collect them. But don't necessarily do that. Because the system is designed so that if you live an average-length life, it will be a wash whether you start collecting early or late. Delaying starting to collect is a good strategy only for those who are likely to live extra-long lives, who can afford to wait, and/or who want to build up a big benefit as part of a strategy with their spouse .
No. 4: Work for 35 years -- or more
Another way to beef up your benefits is to work the formula: The formula that the Social Security Administration uses to compute your benefits is based on your earnings in the 35 years in which you earned the most (adjusted for inflation). If you only earned income in 30 years, the formula will be incorporating five zeros, which will shrink your benefits to some degree. Thus, if you're planning to retire before working a full 35 years, think about whether it would be worthwhile to delay. Even working just a few more years can make a difference.
Next, even if you have worked for 35 years, you might want to work a few more beyond that. Why? Well, remember that the formula is based on your 35 highest-earning years (adjusting for inflation). So if you're currently earning a lot more (on an inflation-adjusted basis) than you used to, for each additional year you work, your lowest-earning year(s) will get kicked out of the calculation, boosting your benefits. (This is a good reason to aim for a higher income now -- perhaps by asking for a raise or getting a side gig , or by changing your career or getting an additional degree or certification or two.)
No. 5: Consider spousal benefits
If your expected benefits are quite low, but your spouse (or possibly even your ex-spouse) has earned a lot and expects substantial benefits, know that you may be able to collect a "spousal benefit," based on their earnings and not your own. Spouses can collect benefits worth up to 50% of their other half's benefits. This can be the best move for spouses who never worked or earned very little.
No. 6: Live in a state that doesn't tax Social Security benefits
One way to maximize your Social Security benefits is to not have them taxed, or at least to minimize the tax. Not only might your benefits get taxed by the federal government , but depending on where you live, your state may also tax them. Right now, 37 of the 50 states leave benefits untaxed, but there are 13 states in which some or all of your benefits are subject to taxation: Minnesota, North Dakota, Vermont, and West Virginia fully tax benefits, while you'll only face partial taxation in Colorado, Connecticut, Kansas, Missouri, Montana, Nebraska, New Mexico, Rhode Island, and Utah.
Don't hire a moving van yet if you live in one of the states that does tax benefits, though, because in many cases, the tax is either very low or only kicks in at a high threshold that you may not reach. Look into the details about how states tax benefits.
No. 7: Strategize with your spouse
Finally, know that if you're married, there are a bunch of Social Security strategies that you might employ. Here's a particularly good one: If you've earned a lot less over your working life than your spouse, your spouse's benefit checks are likely to be larger. The two of you might start collecting your checks early while delaying collecting your spouse's checks, so that those checks can grow even bigger. That gives you both some income early, and when the higher-earning partner starts collecting, you'll get to enjoy much more income from two checks. Eventually, when one of you dies, the surviving spouse will get to collect the larger benefit checks.
Social Security decisions and other retirement-related choices are critical to your future financial security, so take time to read up and think through them carefully. Consider consulting a professional financial advisor, too, as a good one might be able to steer you toward strategies that are best for you. Favor fee-only financial advisors, whom you can find via referrals from friends or at the website of the National Association of Personal Financial Advisors.
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