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Learn what you and your family can do to get the most from your Social Security benefits.
For many, Social Security is the only income they will receive upon retirement that is both guaranteed for life and inflation-protected. While these benefits are certainly helpful and necessary for our golden years, they are also modest. The average Social Security payment is around $1,500 a month. But there are ways to ensure you and your family are receiving the most from your benefits.
Don’t take your benefits until you’ve reached your retirement age.
The Social Security Administration allows you to begin taking benefits before your full retirement age. While this may be tempting, be aware that if you take this option you’ll only receive a portion of your total possible benefits for the remainder of your life.
Waiting to claim your benefits until you’ve hit your full retirement age can also help your spouse and minor children. (Not sure when you can claim your full benefits? Find out your retirement age.)
Have your spouse claim on your benefits.
Are you the higher earner in your relationship? Your spouse can receive up to 50% of your Social Security benefits—without reducing the amount that you receive. However, the lower-earning spouse must wait until their full retirement age to collect the maximum benefits under this rule; otherwise, their earnings will be reduced. Widows and widowers can also receive their higher-earning spouse’s benefits, beginning at age 60.
No longer married to your higher-earning spouse? You can still take advantage of this provision as long as you were married for at least 10 years, have been divorced for at least two years, are unmarried and are at least 62 years old. (If you remarry, your spousal benefits will stop.)
File and suspend your benefits.
If you are the higher earner your spouse can’t claim on your benefits until you file. But what if you want to keep on working to increase your benefits? You can do both! If you’ve reached full retirement age, you can apply for your Social Security benefits, then request to have them suspended. By filing, your spouse can then apply to receive 50% of your benefits (if they are of full retirement age) and you can continue working and earning additional benefits until the age of 70.
Take a spousal benefit and continue working.
This strategy makes sense for dual-income spouses who have relatively equal earnings. Essentially, you’re claiming benefits twice. Once you’ve both reached full retirement age, you can file to receive 50% of your spouse’s benefits while continuing to work to increase your own Social Security benefits. Once you retire, you can then switch to receive your own benefits; since you’ve worked past your retirement age, you’ll receive a higher monthly amount.
Delay your retirement.
Continuing to work after your retirement age can be rewarding in many ways, including financially. For each year after your retirement age that you delay claiming Social Security, your benefits will increase by 8% until age 70. This includes any cost of living adjustment (COLA) increases.
Not sure what you’ll receive from Social Security? Your benefits are based on your highest-earning 35 years of work (which don’t have to be consecutive). View this retirement calculator to estimate the benefits you’ll receive.
This article contains general information. Individual financial situations are unique; please, consult your financial advisor or tax attorney before utilizing any of the information contained in this article.
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