Maximizing your Social Security benefits can be challenging due to the hundreds of rules governing payments. However, since Social Security is a primary income source for most retired Americans, it’s crucial to ensure you’re getting everything you’re entitled to.
Philip Moeller, coauthor of *Get What's Yours: The Secrets to Maxing Out Your Social Security*, emphasizes, "Claiming benefits early frequently costs people hundreds of thousands of dollars in reduced benefits over their lifetime. Failure to claim benefits at all is also a big problem."
While the rules are complex, following these simple guidelines can help you maximize your Social Security benefits.
1. Wait to Claim Your Benefits
You can start receiving Social Security as early as age 62, but waiting until age 70 can significantly increase your benefits. According to a Nationwide Retirement Institute survey, 30% of preretirees plan to claim benefits before their full retirement age, but 25% of those who did so regret it.
Why Wait?
Your benefit grows by 8% annually if you delay claiming until age 70.
Use the [Social Security Retirement Estimator](https://www.ssa.gov/benefits/retirement/estimator.html) to calculate how much you’ll gain by waiting.
Planning Tip: Create a free [mySocialSecurity account](https://www.ssa.gov/myaccount/) to access your personalized Social Security statement and verify your earnings history, which is used to calculate your benefits.
2. Claim a Spousal Benefit
If you didn’t work or earned less than your spouse, you may qualify for a spousal benefit. This benefit can be up to 50% of your spouse’s full retirement benefit and doesn’t affect their payment.
Key Points:
Your spouse must have already filed for retirement or disability benefits.
Spousal benefits are ideal for nonworking or lowerearning spouses.
3. Decide Between Spousal and Your Own Benefit
If both you and your spouse worked, but your spouse earned significantly more, you might benefit more from claiming a spousal benefit instead of your own retirement benefit. Alternatively, you can file a restricted application to claim only the spousal benefit now and delay your own retirement benefit until later.
Important Notes:
The restricted application option is only available if you turned 62 before January 2, 2016.
Use tools like [Social Security Choices](https://www.socialsecuritychoices.com/) or [Maximize My Social Security](https://maximizemysocialsecurity.com/) (each costs $40) to analyze the best strategy for your situation.
4. Avoid Claiming Early If You’re Still Working
Claiming Social Security before your full retirement age while still working can reduce your benefits. If you earn more than $15,720 (2023 limit), a portion of your benefits will be withheld.
Why Delay?
Once you reach full retirement age (66 or 67, depending on your birth year), your benefits will be adjusted upward to account for withheld amounts.
Waiting ensures you receive your full benefit without penalties.
5. Claim Benefits Based on an ExSpouse’s Record
Even if you’re divorced, you can claim spousal benefits based on your exspouse’s earnings record, provided:
You were married for at least 10 years.
You are 62 or older.
You’ve been divorced for at least two years and are not currently married.
Key Benefits:
Your exspouse doesn’t need to approve or even be claiming benefits for you to qualify.
If you remarry, you can no longer claim benefits based on your exspouse’s record.
Strategy:
At full retirement age, file a restricted application to claim spousal benefits.
Delay claiming your own retirement benefit until age 70 to maximize its growth.
6. Use Tools and Calculators
Social Security rules are complex, and the best strategy depends on your unique circumstances. Use these resources to make informed decisions:
Social Security Retirement Estimator: Estimate your benefits based on different claiming ages.
mySocialSecurity Account: Access your earnings history and benefit estimates.
Paid Tools: Consider tools like *Social Security Choices* or *Maximize My Social Security* for personalized analysis.
Conclusion
Maximizing your Social Security benefits requires careful planning and a clear understanding of the rules. By delaying your benefits, exploring spousal or exspousal claims, and avoiding early withdrawals while working, you can significantly increase your lifetime income. Use available tools and calculators to tailor a strategy that works best for your financial situation and retirement goals.
