5 Ways to Maximize Your Social Security Retirement Benefits
Are you retired or approaching retirement? If so, you may be wondering how you can get the most out of your Social Security retirement benefits. You’re not alone, don’t worry. Millions of people wonder exactly the same thing every day and constantly search for retirement benefits tips.
Here’s the scoop:
The truth is, there are quite a few ways to make sure you get the most from your Social Security retirement benefits. These aren’t necessarily secrets, per se, but they are things that people often overlook. Many people, unfortunately, don’t know about these methods for maximizing Social Security retirement benefits.
That all changes right now.
Today, Social Security Disability Advocates USA will show you 5 top ways to maximize your Social Security retirement benefits. So, buckle up!
1. Work for 35 Years or More
To receive Social Security retirement benefits, you need (generally speaking) 40 work credits. One work credit, for the year 2019, corresponds with every $1,360 you earn. You can only earn 4 work credits per year. Essentially, then, once you earn $5,440, you’ve reached the maximum 4 work credits you can earn for that year.
Now, why does this matter? Well, here’s why: Social Security requires 40 work credits. This essentially means you can collect retirement with as little as 10 years of work under your belt. But it’s not a good idea. Why? Because the Social Security Administration (SSA) uses your 35 highest-paying working years when calculating your retirement benefits. So, if you only worked 10 years, that means 25 zeroes will be put into the equation and then averaged which substantially lowers your retirement benefits! What you should try to do is work at least 35 years or even longer, since the highest-earning years are the ones that will be calculated. In addition, it’s always better to work steadily than to take gap years in your work. You do not want a zero averaged into your retirement benefits.
2. Don’t Claim Before Full Retirement Age (FRA)
You can claim your retirement benefits as early as age 62. However, this is a bad idea for most people. The full retirement age (FRA) is between 65 and 67. For people born 1937 or earlier, the FRA is 65. For people born 1943-1954, the FRA is 66. The FRA keeps increasing, until finally, for people born 1960 or later, the FRA is 67.
Why does this matter? Because the SSA will permanently reduce your benefits if you take your retirement benefits early. That’s right. For example, if your FRA is 67 and you take your retirement at age 62, your monthly benefits are permanently reduced by 30%! If you take retirement at age 63, your benefits are permanently reduced by 25%. If you take them at 64, you’ll see a 20% reduction, and so on. The earlier you take your retirement benefits, the more they will be reduced – permanently.
While taking an early retirement has benefits for some people, you should seriously consider if the permanent reduction in benefits is worth it.
3. Claim Benefits at Age 70
Now you know that generally, you shouldn’t claim benefits early if you want the most out of your retirement. But wait: there’s more you can do to maximize your retirement benefits.
When you reach your full retirement age, your Social Security retirement benefits still continue to grow. Indeed, your benefits still have much to gain. Your Social Security retirement benefits grow approximately 8% for every year after your full retirement age that you don’t claim them, all the way to age 70. This is because of delayed retirement credits. For example, if your full retirement age is 67 and you wait until age 70 to claim your benefits, you will see a permanent 24% increase in your monthly benefits for the rest of your life. Therefore, you should try to delay your retirement benefits for as long as possible. Doing this will unquestionably get you the most out of your retirement, as waiting until age 70 caps out your Social Security retirement benefits’ delayed retirement credits. In other words, there’s no benefit to waiting after age 70 to claim your retirement benefits.
4. Watch Your Earnings
When you are working before you receive benefits, it’s important to make sure you earn as much as possible. As we discussed, the SSA will use your 35 highest-earning working years when calculating your benefits. So, asking for a raise or even taking a second job could be incredibly beneficial for you. You want to eliminate your low-earning years from the calculation, so earning more can help with that.
However, working while already receiving retirement benefits is a different story. If you are receiving early or full retirement benefits while working, you should be incredibly careful of how much you earn. For example, if you are younger than your full retirement age, $1 for every $2 you earn above the annual limit is deducted. For 2019, that limit is $17,640. If you reach full retirement age in 2019, you give $1 for every $3 you earn above the annual limit. That limit is $46,920. This only applies to the months before you reached full retirement age; however, once you reach full retirement age, how much you earn will no longer affect your benefits.
5. Think Strategically
There are some other things you can do to make sure you get the most of your benefits.
For example, if you’re eligible for a spousal or survivor benefit, you may want to look into how you should go about claiming those benefits. As a general rule of thumb, you should not claim both benefits simultaneously. This is because when you do this, you will receive a check that is equal to the larger of the two benefits, not a check that is equal to the sum of the benefits. Usually, you should take the lesser of the two benefits first, followed by the larger of the two.
For example, if your retirement benefits are $1,800 a month but your survivor benefits are $2,000 a month, take your retirement first until you reach your full retirement age. By this point, your survivor benefits will have substantially grown, and they will be worth much more than your own retirement benefits. Applying for both benefits simultaneously, however, would have gotten you only $2,000 a month for the rest of your life.
That was just one example, but the principle is this: Have a plan for your benefits, especially if you qualify for many types of benefits. You don’t want to forever lose out on money you qualify for just because you made a mistake. If you have questions about your Social Security benefits, call Social Security Disability Advocates USA for immediate assistance. We’ll help you come up with a plan that is right for you!
Want More Retirement Benefits Tips?
If you have further questions about Social Security, contact Social Security Disability Advocates USA right away! Our experienced professionals work day and night to address all your Social Security concerns. You can contact us anytime at 602-952-3200. In addition, you can contact us online and visit our website. Don’t’ forget to check out our LiveChat feature! Keeping your questions to yourself could cost you dearly, so speak your mind and contact SSDA USA today!
This is attorney advertising. SSDA, LLC is a group of attorneys that pursues claims for Social Security Disability benefits on behalf of its clients against the Social Security Administration. SSDA, LLC is in no way a part of the Social Security Administration. Further, the information on this blog is for general information purposes only. Nothing herein should be taken as legal advice. This information is not intended to create, and receipt or viewing does not constitute, a representative-client relationship.
