A Social Security Guide: 55 Tips To Maximize Your Benefits (2024)

The Best Time To File Social Security Benefits

You can start getting Social Security benefits at different times, and this choice affects how much money you get:

• Start Early at 62: You can start getting money as early as age 62. But, if you do, you get less each month (up to 30% less). The plus side is you get these smaller payments for more years.
• Wait Until Full Retirement Age (FRA): Your full retirement age is between 66 and 67, depending on when you were born. If you wait until then, you get the full amount of money you’re supposed to get. This full amount is what Social Security calls your “primary insurance amount” (PIA).
• Start After Your FRA: If you can wait even longer to start getting benefits, you’ll get more money. For each year you wait past your full retirement age, you get 8% more. But this stops when you turn 70. So, there’s no reason to wait longer than that. By waiting, you get more money each month, but for fewer years since you started later.

Maximize Social Security Retirement Calculator

The key to a comfortable retirement is having a steady income that you can rely on. For many people, that income comes from Social Security. However, maximize your benefits by timing your retirement around annuities. Annuities provide a guaranteed retirement income for the rest of your life, so you can time your retirement at the perfect age. Use our calculator to determine when both Social Security Income and annuity lifetime withdrawals provide the perfect retirement income. That way, you can relax and enjoy your golden years without worrying about money.

Social Security Full Retirement Age

Is Social Security An Annuity?

Technically, Social Security is not an annuity, but the income payments work similarly to an annuity.

Marital Status

Single

If you’re single, you can choose when to start getting Social Security based on what’s good for you alone. Waiting longer to start means more money each month for life. But, it’s smart to discuss with a financial expert because sometimes starting early might be better for your situation.

Married

If you’re married, you usually get either your own Social Security amount or half of what your spouse gets, whichever is more. This doesn’t change, even if your spouse waits to claim to get more money.

You can only start getting this money when your spouse applies for Social Security. If you apply for the spouse’s share before you reach the full retirement age, you’ll get less money, and it could be as low as about one-third of your spouse’s full amount, depending on how early you file.

Divorced

If you’re divorced, you might be able to get Social Security based on your ex-spouse’s work history if:

• You were married for ten or more years.
• You’re 62 or older and not currently married (your ex’s current marital status doesn’t matter, and if you remarried but are now single, that’s okay too).
• Your ex-spouse has a higher Social Security benefit than you.
• Your ex is old enough to get retirement benefits. But, unlike current spouses, you can get this benefit if you’ve been divorced for two years, even if your ex hasn’t started their Social Security.

Widows

Social Security helps surviving spouses and dependents when someone passes away. A surviving spouse can get all of the deceased’s benefits if they were married for at least nine months (shorter if the death was accidental).

• If a spouse is already getting money based on their partner’s work, Social Security will change the amount they get after being told about the death.
• If a spouse is getting money based on their own work, they need to ask for the survivor’s benefits. They’ll get whichever amount is higher, their own or their deceased spouse’s.
• If a spouse isn’t getting any benefits yet, they should ask for the survivor’s benefits right away. Waiting might mean getting less money in the long run.

Taxation Of Social Security Benefits

If you only get money from Social Security, you won’t have to pay taxes on it. But if you have more money coming in from other places, you might have to pay taxes on your Social Security.

To figure out if you’ll owe taxes, add up all the money you’ll get in retirement (like wages, pension, money from retirement accounts, and income from investments, even tax-free ones) and then add half of what you get from Social Security. This total helps you guess if you’ll owe taxes and how much.

Helpful Tool: Social Security Calculators

What Is The Five-Year Rule For Social Security?

The Five-Year Rule is critical when considering your Social Security retirement benefits. Under this regulation, you must have at least five years of covered earnings to fully qualify for your retirement benefits. Covered earnings refer to the money that has been reported on which you paid taxes, such as wages or self-employment income.

The Five-Year Rule applies when you’re at least age 62 but before you reach full retirement age (between 65 and 67). Your benefits will be reduced if you have not earned five years of covered earnings by reaching this retirement age in 2023. But, if you haven’t worked long enough to meet the five-year rule, you won’t receive your full Social Security retirement benefits.

The Five-Year Rule is important to consider when saving for retirement. If you anticipate needingSocial Securityin the future, you must have five years of covered earnings to maximize the amount of money you receive.

To ensure you have enough covered earnings, consider consulting a financial advisor who can help weigh the benefits of various savings accounts and investments to determine which suits your situation.

Medicare And Social Security

Social Security and Medicare are somewhat linked. Here’s how they work together:

• If You Retire Early: If you stop working and start getting Social Security before 65, you’ll automatically get Medicare when you turn 65. The cost for Part B of Medicare will come out of your Social Security payments.
• If You Haven’t Started Social Security by 65: You’ll need to sign up for Medicare yourself around the time you turn 65. You don’t have to get Part B, but if you skip it and then want it later, it could cost you more as long as you have Medicare. Until you get Social Security, you’ll get bills for Part B.
• If You’re Still Working at 65: If you or your spouse have a job with health insurance when you turn 65, you might be able to sign up for Part B later without extra fees after you stop working.

How To Fix Social Security Mistakes

• Repaying Social Security Benefits: If you regret starting your Social Security benefits too early, you can file Form SSA-521 within the first 12 months to withdraw your application, requiring you to repay the benefits you received. This action resets your Social Security, allowing you to apply for benefits later, potentially at a higher rate.
• Returning to Work: If you’ve already started taking benefits but decide to return to work, your benefits may be adjusted based on your earnings. This isn’t a penalty but a recalibration of benefits. If you forego certain amounts due to higher earnings, your future Social Security benefits will be increased to account for the months when benefits were reduced or withheld.
• Suspending Social Security Benefits: If you reached full retirement age and wish to pause your benefits, you can do so to earn delayed retirement credits, increasing your monthly benefit amount when you choose to restart them. This strategy can help mitigate the impact of claiming benefits early.
• Strategic Planning for Couples: If your spouse hasn’t started their Social Security, adjusting the timing of their benefits can help optimize overall household benefits, especially if one person claimed benefits early.

Tips To Boost Your Social Security Income

1. Work for at Least 35 Years: Social Security benefits are calculated based on your 35 highest-earning working years. If you work for fewer years, you’ll have years with zero income averaged in, which will lower your payout.
2. Boost Your Earnings: The more you earn, the higher your Social Security benefits may be, up to a certain limit. Pursuing promotions, raises, and new job opportunities can be beneficial.
3. Delay Claiming Until Full Retirement Age (FRA): Filing for Social Security before your FRA (which varies based on your birth year) will reduce your monthly benefit amount.
4. Consider Waiting Until Age 70: If you can afford it, waiting until age 70 to start collecting Social Security will maximize your benefits. You’ll receive delayed retirement credits that will increase your monthly benefit.
5. Check for Spousal Benefits: Even if one spouse didn’t work, they might be eligible for benefits based on the working spouse’s record. Spousal benefits can be as much as half of the worker’s benefit amount.
6. Include Family: If you have dependents, they may also be eligible for benefits. This includes children under 18, or who have disabilities, and in some cases, even grandchildren.
7. Don’t Earn Too Much in Retirement: If you claim Social Security before your FRA and continue to work, be mindful of the earnings limit. Exceeding it can temporarily reduce your benefit amount.
8. Minimize Social Security Taxes: Up to 85% of your Social Security benefits may be taxable. Strategies like investing in Roth IRAs, which have tax-free distributions, can help minimize how much of your benefit is taxed.
9. Reexamine Divorce Decrees: If you were married for at least ten years, you might be eligible for Social Security benefits based on your ex-spouse’s work record.
10. Claim Survivor Benefits: Widows or widowers can claim survivor benefits, which could be worth as much as 100% of what the deceased spouse was eligible for.
11. Understand Disability Benefits: If you’re unable to work due to a medical condition, you might be eligible for Social Security disability benefits.
12. Correct Errors on Your Earnings Record: Check your Social Security earnings record for errors. If earnings are underreported, it can reduce the amount of your benefit.
13. Explore Retirement Credits: If you served in the military, you might be eligible for added Social Security credits.
14. Avoid Social Security Scams: Protect your Social Security number and personal information to prevent identity theft that could jeopardize your benefits.
15. Stay Informed About Policy Changes: Social Security rules can change. Stay informed to understand how these changes might affect your benefits.
16. Review Different Claim Strategies: There are different strategies for claiming Social Security. Review all your options to determine which is best for your situation.
17. Work Part-Time in Retirement: If you need additional income, consider working part-time. However, understand how your earnings might affect your Social Security benefits.
18. Coordinate with Your Spouse: If married, coordinate with your spouse on when to claim benefits to ensure that you maximize any spousal or survivor benefits.
19. Delay Social Security Claims with Annuity Income: Use the steady income from an immediate annuity to meet your living expenses while you delay claiming Social Security until the age of 70. This delay allows your Social Security benefits to grow as a result of delayed retirement credits.
20. Purchase Longevity Annuities: Invest in longevity annuities that start paying out later in life, such as at age 80 or 85. These can provide additional security in case you outlive your other retirement savings, complementing Social Security, especially if you’ve taken early benefits.
21. Create a Pension-Like Stream: If you don’t have a pension, you can use an annuity to create a similar stream of guaranteed lifetime income, supplementing your Social Security payments and reducing your reliance on them.
22. Consider Inflation-Adjusted Annuities: Some annuities offer inflation protection, similar to the cost-of-living adjustments (COLAs) provided by Social Security. This feature helps ensure that the purchasing power of your annuity income keeps pace with inflation.
23. Use Annuities for Non-Essential Expenses: Structure your finances so that Social Security covers your essential expenses, while annuity payments can fund non-essential expenses. This approach reduces financial stress and helps ensure that basic living costs are always covered.
24. Plan for Healthcare Costs: Annuities can be used to cover healthcare costs, a significant expense in retirement, without having to reduce your Social Security income. Certain annuity products are designed specifically for healthcare-related expenses.
25. Combine with Spousal Benefits: If you’re receiving Social Security based on your spouse’s work record, consider purchasing an annuity to increase your individual retirement income. This strategy provides additional financial stability if your spouse passes away before you do.
26. Asset Protection: Annuities can protect your retirement savings from market volatility, ensuring you have a steady income in down markets. This stability means you won’t have to claim Social Security early because of market-driven financial needs.
27. Tax Planning: Annuities can offer tax-deferred growth, which can be beneficial if you’re trying to control your taxable income to minimize taxes on Social Security benefits.
28. Customize Annuity Products: Work with an annuity broker to customize annuity products that work in tandem with your Social Security benefits. For instance, you might structure annuity payments to fill in gaps or to kick in if you outlive your life expectancy.
29. Provide for Survivors: Life insurance policies that ensure your dependents are cared for if you pass away, potentially reducing their need to claim Social Security survivor benefits early and allowing these benefits to grow until they reach full retirement age or beyond.
30. Supplement Retirement with Cash Value: Certain types of life insurance, such as whole life or universal life, build cash value over time that you can borrow against. This feature can provide an additional source of retirement income, allowing you to delay claiming Social Security benefits.
31. Cover Burial and Final Expenses: Life insurance can cover funeral costs and other final expenses, relieving your family of financial burden and preventing the need to use Social Security benefits for these purposes.
32. Leverage a Life Settlement: Older policyholders might consider a life settlement, selling their life insurance policy for a lump sum. This strategy could provide a cushion of income for retirees, potentially enabling them to delay taking Social Security until full retirement age or later.
33. Protect Benefits from Taxes: Life insurance proceeds are generally tax-free, which can be especially beneficial for heirs, ensuring that they receive the full benefit of the policy and potentially reducing the tax burden on your Social Security benefits.
34. Use as Collateral for Loans: If you need cash during retirement and don’t want to incur penalties by tapping retirement accounts early, you might be able to use your life insurance policy as collateral for a loan, allowing you to defer Social Security benefits.
35. Transfer Wealth: Life insurance is an effective tool for transferring wealth to the next generation without the same tax implications as large Social Security benefits, which might be subject to federal income taxes.
36. Plan for Estate Taxes: If you have significant assets, life insurance can help cover estate taxes, thus preserving your wealth for heirs rather than having to liquidate assets, which could include needed Social Security benefits.
37. Supplement Income with an Annuity Conversion: Some life insurance policies can be converted into annuities, providing a steady stream of income during retirement and enabling you to optimize the timing of when you claim Social Security benefits.
38. Bridge the Gap Before SSDI: If you become disabled and are waiting for Social Security Disability Insurance (SSDI) to kick in, a private disability insurance policy can provide income during the waiting period, helping you avoid claiming Social Security retirement benefits early.
39. Supplement SSDI Benefits: Private disability insurance can supplement SSDI, which often only covers a portion of your previous income. Having additional coverage means you won’t need to rely solely on Social Security for income if you’re disabled.
40. Protect Your Retirement Benefits: By using disability insurance payouts to cover living expenses if you’re unable to work, you can avoid dipping into retirement savings or claiming Social Security retirement benefits prematurely, allowing those benefits to grow.
41. Consider a Policy with a Cost-of-Living Adjustment (COLA): Disability insurance with COLA increases your disability benefits over time to keep up with inflation, similar to Social Security’s annual cost-of-living adjustments, helping maintain your purchasing power.
42. Understand the “Own Occupation” Feature: Look for disability insurance that covers you if you’re unable to perform the duties of your specific occupation (as opposed to any job). This can make it easier to qualify for benefits and protect your income without prematurely tapping into Social Security.
43. Plan for the Elimination Period: Choose an elimination period (the time before benefits begin) that you can comfortably cover with savings to avoid financial strain or early Social Security claiming. Shorter elimination periods mean higher premiums, so balance costs with your financial cushion.
44. Maintain Steady Coverage: Keep your disability insurance coverage consistent. Gaps can lead to denials based on pre-existing conditions and might force you to rely more heavily on Social Security.
45. Review Policy Provisions for Mental Health and Other Limitations: Understand the terms of your disability insurance, as some policies have limited coverage for mental health issues or certain physical injuries. Comprehensive coverage ensures broader protection and less reliance on Social Security.
46. Coordinate Benefits Wisely: If you’re eligible for both SSDI and private disability insurance, understand how they interact. Some private policies may reduce benefits by the amount received from SSDI. Plan accordingly to ensure a steady income.
47. Preserve Your Retirement Savings: By using long-term care insurance to cover the costs of long-term care, you can preserve your retirement savings and avoid the need to use Social Security benefits to pay for healthcare costs, allowing you to maximize these benefits over time.
48. Delay Claiming Social Security: If you need long-term care at an earlier age, having long-term care insurance means you won’t have to claim Social Security early to cover those costs, which would permanently reduce your benefits. You can delay claiming until your full retirement age or even later to receive increased benefits.
49. Protect Against Inflation: Consider a long-term care insurance policy that offers inflation protection to ensure that the benefit amount will increase over time, which is important as the cost of care rises. This approach complements the cost-of-living adjustments that Social Security provides.
50. Customize Your Coverage: Choose a long-term care policy with flexibility in terms of where you receive care (e.g., in-home care, assisted living, nursing home) to avoid unexpected out-of-pocket expenses that could force you to dip into your Social Security benefits.
51. Consider Shared Care Policies: If you’re married, look into shared care policies that allow you to share total coverage with your spouse. This option can extend the duration of coverage without increasing premiums, protecting your household income, including Social Security benefits.
52. Plan for Potential Tax Benefits: The premiums you pay for a tax-qualified long-term care insurance policy can be tax deductible. This deduction can reduce your taxable income, potentially reducing taxes on your Social Security benefits as well.
53. Understand the Impact on Medicaid: If you anticipate the possibility of applying for Medicaid, understand that having long-term care insurance could protect your assets, including potentially keeping more of your Social Security income, as Medicaid eligibility requires depleting most of your resources.
54. Secure Your Financial Legacy: Long-term care insurance helps protect your estate by covering care costs, ensuring that you can leave an inheritance to your heirs rather than spending down your assets, including potentially your accumulated Social Security benefits, on healthcare.
55. Review the Elimination Period: Policies have an elimination period, or deductible phase, during which you pay out-of-pocket. Ensure this period is financially manageable without tapping into Social Security benefits prematurely.

Conclusion

To sum up, using these 55 tips can help you make the most of your Social Security benefits, giving you steady money in retirement. It’s important to know how timing and your personal details affect your payments. Planning ahead and maybe getting advice from a financial expert can help you use Social Security wisely, making your retirement more comfortable and worry-free.

Get Help Maximizing Social Security Benefits

Get help from a licensed financial professional. This service is free of charge.

Frequently Asked Questions

Related Tools

• Effects Of Inflation On Retirement Savings Calculator
• 401k Calculator
• Roth IRA Calculator
• Required Minimum Distribution (RMD) Calculator
• Traditional IRA Calculator
• 403b Calculator
• 457 Plan Calculator
• Life Insurance Calculator