5 Ways to Maximize Your Social Security Benefits

Getting the answers wrong could mean losing out on thousands of dollars at the end of your lifetime — dollars you worked decades to earn. Luckily, there are various strategies you can use to get the most out of your benefits.

While every situation is unique, here are 5 common ways to help optimize your social security income in retirement:

1. Work for at least 35 years.

Social Security calculates your average indexed monthly earnings by using your 35 top-earning years in the workforce. If you’ve worked less than 35 years, that means yearly incomes of $0 are being used to calculate the average, lowering your payments. Consider continuing working for a few more years if you have less than 35 years of employment history or had some lower-earning years.

2. Don’t claim before you hit full retirement age.

Full retirement age is 66 years old for those born before 1960, and 67 for those born afterward. While you technically can claim your benefits earlier, this is usually not the best idea. Signing up

at age 62 can result in a reduction of your payments 25-30%, depending on your birth year.

3. Delay until age 70.

By waiting until age 70, you can earn delayed retirement credits. You can increase your social security income by 25 percent or more, even if you stop working. This strategy is ideal for someone with a normal life expectancy and is not currently facing any serious health issues or needing assisted living services. Past age 70, you can no longer accrue delayed retirement credits.

4. Suspend payments.

If you started Social Security benefits before full retirement age, then you can undo your decision within 12 months of starting benefits (called a withdrawal). To do so, you will have to repay ALL benefits received. This gives you a fresh start and you can claim benefits at a later time.

If you started Social Security benefits after your full retirement age, then you have the opportunity to suspend benefits. At any time (before age 70), you can stop your benefits and earn the delayed retirement credit, which is equal to 2/3 of one percent for each month it’s delayed. The delayed retirement credits accrue until the age of 70.

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