How to Maximize Your Social Security Benefits
Would you be satisfied receiving just 70 percent of the retirement benefits you spent a lifetime working for? Many people unknowingly reduce their lifetime income by filing for Social Security at the wrong time. In this guide, we’ll show you how your decision on when to apply for Social Security can permanently impact your monthly benefit and what steps you can take to maximize it.
Understanding Social Security Filing Ages
If you’re applying for traditional Social Security retirement benefits, not disability or survivor benefits, the earliest you can start receiving payments is age 62. You can apply up to three months in advance beginning at age 61 and nine months. However, the timing of your birthday matters.
You only officially reach age 62 once you’ve been that age for a full calendar month. For example, if your birthday is June 23, your first full month of eligibility would be July, and your first benefit check would arrive in August.
How Filing Early Reduces Your Benefits
Filing for Social Security before your full retirement age means a permanent reduction in your monthly benefits. Your full retirement age depends on your birth year:
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Born 1943 to 1954: full retirement age is 66
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Born 1955 to 1959: add two months for each year (1955 = 66 and two months, 1956 = 66 and four months, etc.)
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Born 1960 or later: full retirement age is 67
Here’s an example. Jeff’s full retirement age is 67, and he qualifies for a $2,000 monthly benefit at that age. If he files at age 62, his benefit will be permanently reduced by 30 percent, dropping his monthly payment to $1,400.
Waiting Until Age 70 Has Big Rewards
If Jeff can afford to wait until age 70, his benefit increases by 8 percent per year beyond his full retirement age, up to a maximum of 24 percent. Instead of receiving $2,000 at 67, he would receive $2,480 per month at age 70. That is a significant lifetime increase.
Your Social Security Also Affects Your Family
If you are married, delaying benefits can help maximize survivor benefits. When one spouse passes away, the surviving spouse can receive 100 percent of the higher benefit. Increasing your benefit now means more income for your loved one in the future.
Still Working? Know the Earnings Limit
If you plan to keep working after filing early for Social Security, be aware of the earnings limit. If you are under full retirement age and earn more than the annual limit, Social Security will withhold one dollar in benefits for every two dollars you earn above the limit.
The good news is:
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Once you reach full retirement age, you can earn as much as you want without penalty
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Withheld benefits will be factored back into future payments
When Should You Apply?
Here’s a simple guideline:
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If you are turning 62 soon, apply up to three months before your birthday month
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If you are already older than 62, apply four months before you want your benefits to start
You can apply in the following ways:
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Online at ssa.gov
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By calling 1-800-772-1213
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In person at your local Social Security office
Be Prepared with Your Documents
During your application, you may need to provide:
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Birth certificate
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Marriage certificate
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Social Security card
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Recent W-2 forms or tax returns
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Bank account information for direct deposit
Review Your Earnings Record Annually
To ensure your benefits are accurate, sign up for a My Social Security account at ssa.gov and review your earnings history each year. Your benefit is based on your highest 35 years of income, so any missing or incorrect years can reduce your benefit if not corrected.
Don’t Forget About Medicare Costs
When planning your Social Security strategy, remember that Medicare premiums will be deducted from your monthly check. Most retirees are surprised to find that Medicare is not free. Consider:
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Part B premiums will reduce your Social Security income by about 10 percent
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Medicare only covers about 80 percent of health care costs
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Most retirees will pay additional premiums for a Medicare Supplement, a Part D drug plan, or a Medicare Advantage plan
If these costs are a concern, consider delaying Social Security by a year or two to earn higher monthly benefits that help cover Medicare expenses.
Final Thoughts
Maximizing your Social Security benefits means thinking long term. The difference between filing at 62 and waiting until 70 can add up to hundreds of thousands of dollars over your lifetime. Always consult a financial advisor to help you make the best choice for your goals, health, and family.
Next Steps
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Visit ssa.gov to create your account and explore your benefit estimates
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Speak with a financial planner about your retirement income strategy
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Learn how Medicare fits into your plan by watching this helpful video