Workers contribute to the Social Security fund through payroll taxes that they pay throughout all their years in the workforce. So you're entitled to make the most of your benefits. This article shares nine ways you may be able to enhance your Social Security benefits.
Key Takeaways
- Retirees can boost their Social Security benefits with a few key strategies.
- Wait to retire until full retirement age (FRA).
- For the maximum payout, delay applying for your benefits until age 70.
- If you work while getting benefits, make sure you don’t go beyond the earned-income limits that will reduce your benefits.
- Don’t overlook spousal, dependent, and survivor benefits.
Strategies to Boost Your Benefits
There are nine steps that could go a long way toward helping you maximize your Social Security retirement benefits. You can use a combination of the following strategies (some of which have eligibility requirements):
- Work for 35 years
- Wait until at least full retirement age to collect benefits
- Collect spousal benefits
- Receive dependent benefits
- Monitor your earnings
- Watch out for tax bracket creep
- Apply for survivor benefits
- Check your Social Security statement for mistakes
- Halt benefits temporarily
The Social Security Administration (SSA) periodically increases Social Security benefits through what is called a cost-of-living adjustment (COLA). The COLA bumps up benefits to reflect rising prices (otherwise known as inflation).
In 2024, Social Security and Supplemental Security Income (SSI) beneficiaries received a 3.2% COLA. The estimated average monthly benefit for retired workers rose to $1,907.
Below is information about the nine ways you may be able to increase your Social Security benefits.
1. Work for 35 Years
You can be eligible for Social Security benefits after working for as little as 10 years, and you can begin receiving benefits as early as age 62 or as late as age 70. Your benefit amount is based on the average of your 35 highest-earning years. If you work for fewer years, those zeros are averaged in.
As your benefit is based on your highest-earning years, the more you earn, the greater your benefit. There are limits, though. The maximum benefits for 2024 are $2,710 for those retiring at age 62, $3,911 for those retiring at the full retirement age of 67, and $4,873 for those retiring at age 70.
2. Wait Until at Least FRA to Collect Benefits
As you can see from the maximum levels above, you can retire as young as 62 and collect Social Security, but your benefits will be reduced by 25% to 30%. For everyone born after 1942, the full retirement age (FRA) is 66, with two months added for each year after 1954. For those born in 1960 and after, it is age 67.
It’s wise to wait until the FRA to start collecting your benefits if you want to get the greatest amount you’re eligible to receive. And if it makes sense for your life situation, you can wait even longer and become eligible for delayed retirement credits that increase your monthly payment even more.
3. Collect Spousal Benefits
If you’re married, care for a child, have little earned income, and are at least 62 years old, you may be eligible to receive benefits through your spouse. The spousal benefit can be as much as 50% of your partner’s benefit, depending on when the partner retires.
Even divorcees are eligible. In fact, both parties in a divorce can claim spousal benefits based on the other spouse’s Social Security earnings. However, if you have remarried,you cannot collect your ex-spouse’s benefits.
4. Receive Dependent Benefits
If you are retired and have dependents under age 19, they are entitled to up to 50% of your benefit. This dependent benefit doesn’t decrease the amount of Social Security benefits that a parent can receive. They are added to what the family receives.
5. Monitor Your Earnings
If you continue to work after your Social Security payments begin, keep track of your earnings to ensure that they don’t exceed the allowed limit. If they do exceed it in any year, your benefit will be reduced for that year.
For 2024, the limit on earned income is $22,320 for recipients below FRA and $59,520 in the year that they reach it.
After you have achieved FRA, however, there is no penalty for earned income of any level.
6. Watch Out for Tax Bracket Creep
If you’re still working while receiving benefits, you also have to watch out for income tax bracket creep. Your earnings from employment plus your Social Security benefits could push you into a higher tax bracket. Of course, if you earn enough additional income, the higher tax bracket may not matter compared to the additional cash.
7. Apply for Survivor Benefits
If your deceased spouse (or ex-spouse) was eligible for a higher Social Security payment than you are, you might be eligible for that higher survivor benefit. You might qualify for the higher benefit even if your spouse died before applying for benefits.
If you begin to collect Social Security benefits before you reach full retirement age, not only will you receive a reduced benefit, but after your death, your surviving spouse will also receive less.
8. Check Your Social Security Statement for Mistakes
You get a Social Security statement every year. Do not assume it is accurate. Check the amounts listed in your history of earnings and report any errors to the Social Security Administration.
Remember, your benefits are based on the average of your 35 highest-earning years. A miscalculation for even one or two of those years could impact your benefit for the rest of your life.
9. Halt Benefits Temporarily
You may have the right to suspend your benefits, pay back the money you’ve already received, and then start collecting a greater benefit amount later. You can take this step only if you’ve received your benefits for less than a full year.
This might be an option if you get a job after you retire or inherit money and decide you can afford to delay filing in return for a larger benefit check.
To temporarily stop your benefits, file Social Security Administration Form 521, Request for Withdrawal of Application. When you file again later, your benefit should be higher.
At What Age Is Social Security No Longer Taxed?
Age does not affect whether Social Security is taxed. However, income does. For single retirees making less than $25,000 per year and married couples (who file jointly) making less than $32,000 per year, benefits are not taxable.
If you make more than these amounts, however, you will pay taxes on your Social Security benefits. Benefits are 50% taxable (for individuals who make $25,000 to $34,000 and couples who make $32,000 to $44,000) or 85% taxable (for individuals who make over $34,000 and married couples filing jointly who make over $44,000).
Note that these figures refer to your combined income, which the Social Security Administration defines as your adjusted gross income (AGI) plus tax-exempt interest income plus half of your Social Security benefits.
Is It Better to Take Social Security at 62, 67, or Even 70?
That depends on your life circ*mstances. If you can afford to delay your benefits until age 67 or even age 70, it's worth seriously considering, as your benefits will be greater. For example, if you wait until you're 70 to collect benefits instead of taking them at 62, you'll get an extra 8% a year. (There is no incentive to wait past age 70, as your benefits won't increase any further.)
Can I Draw Social Security at 62 and Still Work Full Time?
Yes, you can work full-time and receive Social Security benefits at age 62. However, if you make more than the limit set by the Social Security Administration, your benefits will be reduced by a certain amount.
One you reach full retirement age, your benefits will no longer be reduced in this way—no matter how much you work. (For people born after 1960, full retirement age is 67. For people born before that, it's 66 or 65, depending on your birth year.)
The Bottom Line
Social Security benefits are a crucial part of retirement planning. You may be entitled to more than you realize. Implementing a combination of some of the strategies set forth above may help you boost your monthly check when you start claiming your well-earned retirement benefits.
