4 ways to maximize your Social Security benefits

Social Security Card

[Note: As most of you know, I’m a financial adviser.  I use a program called Social Security Timing to help clients determine the best Social Security strategy for their situation.  I’ll run that report for free for the first 20 of my readers (that’s you!) who request it.  Certain conditions apply, so just email me if you’re interested (joe@intentionalretirement.com).]

Social Security is a major source of income for many retirees.  How major?  The average retiree gets about 40 percent of their income from Social Security.  For older retirees, that percentage surpasses 50 percent.  It stands to reason then that we should all want to maximize our Social Security benefits.  Here’s how.


You can choose to claim your benefits early, on time or late.  “On time” is also known as your full retirement age and it varies depending on when you were born.  If you were born after 1960, your full retirement age is 67.  If you were born between 1943 and 1954, your full retirement age is 66.  Full retirement increases by 2 months per year for those born between 1955 and 1959 (e.g. 1957 = 66 and 6 months).

If you claim early, your benefits will be reduced by 5/9 of 1 percent per month for the first 36 months and 5/12 of 1 percent for anything over 36 months.  For example, a person born in 1950 who claims at 62 instead of 66 will see his or her benefits permanently reduced by 25 percent.

If you claim late, your benefits will increase by 8 percent per year for each year you wait (for those born after 1943).  So if you want to maximize your Social Security, it’s usually best to wait to claim until on or after your full retirement age.  One instance where it might make more sense to claim early would be if you are in poor health and don’t expect to live very long.

Don’t work

If you’re still working and haven’t reached your full retirement age yet, you should think twice before claiming benefits.  That’s because your Social Security check will be reduced by $1 for every $2 you earn above $15,120 (for 2013).  In the year you reach full retirement age, the penalty is reduced to $1 for every $3 above $40,080.

Unlike the penalty for claiming early, the work penalty is not permanent.  It goes away once you reach full retirement age and your benefits will be increased to compensate you for the prior reduction.  But that doesn’t really help you if you claim early thinking you’re going to supplement your paycheck, only to have those benefits withheld because you make too much money.

Coordinate with your spouse

When claiming, both you and your spouse have a variety options.  Add to that the fact that you are typically entitled to either the benefits you earned yourself or an amount equal to roughly half of your spouse’s benefit and the complexity multiplies quickly.  If you can coordinate your claiming strategies, you can greatly increase your lifetime benefits.  I have seen couples increase their lifetime benefits by $100,000 or more simply by having a well thought out, coordinated strategy.

Don’t forget your Ex

If you’re divorced and haven’t remarried, you may be entitled to claim benefits based on your ex-spouse’s record.  The primary stipulations are that a) you were married for more than 10 years, b) you haven’t remarried and c) you’re older than 62.

So there are a few ideas for maximizing your benefits.  Don’t forget to touch base if you want me to run the Social Security Timing report showing you the best strategy for your situation.

~ Joe

4 Responses to “4 ways to maximize your Social Security benefits”

  1. mark December 24, 2013 at 11:45 am #


    I have read some of your articles on retirement and Social Security. One question I can’t ever seem to find an answer on is my situation. My wife is a school teacher and when I die she won’t collect my ssn. Our thought is that since she is two years younger she will work until age 61 as that is more optimum for her pension. That would make me 63 and I would then start my ssn. We have thought that since she won’t get my ssn then it would best to preserve our portfolio as much as possible for her to use after my death. We don’t want to work until I’m 66.4 mos. love to hear your thoughts and other peoples thoughts.

  2. Joe Hearn February 20, 2014 at 4:51 pm #

    Hi Mark. Sorry for not responding sooner. I somehow missed your comment. You make a great point. If you need the income, there is always a tension between whether to pull from your investments and delay Social Security or take Social Security and preserve your investments. In your case, it might more sense to take the Social Security due to the fact that it sounds like your wife is subject to the windfall elimination provision and won’t be able to retain the higher (i.e. your) Social Security benefits after you die. You will take a reduction in benefits by claiming early, but it will allow you to keep from having to draw from your savings. The best thing to do might be to schedule an appointment with the Social Security office and talk through some “what if” scenarios. Hope that helps. Give me a call if you’d like to talk further.

    ~ Joe

  3. Eugene Park November 8, 2015 at 10:42 pm #

    I was forced to retire when I was 62,I had lost my job and in order to survive I needed the ss income. I’m now 65 and have some job opportunities,how can I increase my ss income?

    • Joe Hearn November 10, 2015 at 3:09 pm #

      Hi Eugene. One option would be to suspend your payments. Once you do that, you will start earning delayed retirement credits again. Then when you decide to quit working for good you can have them reinstate your benefits again at the higher amount. Call Social Security or check with your local office and they will be able to help you with the process and answer any questions you have. Hope that helps. Thanks!


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