Social Security: The Easiest Way to Boost Your Benefits

Social Security benefits help millions of Americans pay their living expenses in retirement. Even though Social Security can be complicated, there's an easy way you can increase the monthly payments you get from Social Security.

In the following video from The Motley Fool's series on retirement investing, sponsored by TD Ameritrade, Fool consumer finance expert Dayana Yochim talks to Dan Caplinger, the Fool's director of investment planning, about this simple way to get more from Social Security: Avoid taking your benefits at the first possible moment. Dan notes that although you can take benefits as early as age 62, there's a high price you'll pay to do so, with benefits as much as a third lower than if you wait until age 66. Moreover, Dan points out that waiting until age 70 is even better, as you get an 8% addition to your monthly check for every year you wait beyond age 66. With so many people misunderstanding this simple rule, Dan concludes that as simple as it sounds, delaying Social Security can be the best financial move you'll ever make in retirement.

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Comments from our Foolish Readers

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  • Report this Comment On April 01, 2014, at 10:28 PM, mazunga wrote:

    People will not reach the minimum age of 65 due to genetic deterioration. Why federal elected official exempt by same S/S age requirement? Media never questioned that angle. furthermore, not a one of our elected oficials possess a degree of Geriatics.

  • Report this Comment On April 02, 2014, at 1:45 AM, mstaurus5213 wrote:

    There are cases where people won't be blessed to see their 62nd or 65th birthday, which is why getting the lesser amount while they need help is better than taking a chance of not receiving any of the monies that they worked so hard for most of their lives. It's not like they're loosing monies, because they are getting more than they already have, and you won't miss what you've never had. The only people who can actually wait for full retirement age are those who already have money, right...

  • Report this Comment On April 02, 2014, at 12:49 PM, hank321 wrote:

    Dan's assertion that you get 8% more each year you wait is an average estimate, depends on what you earn in each of those years,....the incremental amount can be MUCH less. If you live to be 90 or older, then waiting a few extra years makes some sense,...but more than half of folks who are 65 today will never see 90,...

    And also, most firms want their employees older than 60 to retire as soon as possible, because younger people are less expensive to employ.

  • Report this Comment On April 02, 2014, at 5:15 PM, dsandman999 wrote:

    The biggest fallacy with this "wait for it" is it assumes too many things will remain the same, ie you will be in good health, earning the same or more, and still alive. The lucky lucky half of the folks 62 today who make it to 92 will be happy they waited. The other half are very unlikely to get there. That is why it is an avg. If you are 62, 65 or 70 today and your SS payout at 65 would be $1000, then if you die at 72 and assuming the payments stay the same value even if asjusted for inflation then:

    62 today and die at:

    72 = $91,200 (you get $760/month)

    82 = 182,400

    92 = 273,600

    65 today and die at:

    72 = 84,000 (you get $1000/month)

    82 = 204,000

    92 = 324,000

    70 today and die at:

    72 = 33,600 (you get $16,800/Month)

    82 = 201,600

    92 = 369,600

    If you retired at 65 and would have gotten 2000 per month you can just double the numbers. The simple formula is:

    Num of years to live x 12 x monthly SS payment

    so you can adjust it by multiplyin the above by 1.2 for 1200/month, 1.5 for 1500/month, etc.

    If you are not going to make it past 72, now might be a good time to retire, but by 65 for sure.

    At the other extreme, if you are 62 and you still have to send your parents and maybe grandparents birthday cards, waiting to 70 and getting those big SS payments when your 90s is going to be great!

    You also need to subtract off the top the years you are going to be in a nursing home or effectively when your SS will no longer be under your control. The nursing home might be happy you waiting until 70 to retire, but I doubt it will make much of a difference to you.

  • Report this Comment On April 13, 2014, at 8:26 PM, gatkins wrote:

    The Security Trust fund is empty. It contains no bonds or anything else of value. This has been true for the past 30 years, but the public has been misled to believe otherwise the whole time.

    On January 21, 2005, David Walker, Comptroller General of the Government Accountability Office (GAO), made a public statement that was designed to make it clear that the trust fund did not hold any real assets. Walker said, “There are no stocks or bonds or real estate in the trust fund. It has nothing of real value to draw down.”

    The intent of the Social Security Amendments of 1983 was not followed. The surplus Social Security revenue from the tax hike was supposed to be saved and invested in marketable Treasury bonds to build up a reserve with which to finance the retirement of the baby boomers. But that didn’t happen. From the time the first surplus revenue arrived in 1985, until the surpluses ended in 2009, all of the Social Security surplus revenue was deposited into the general fund where it became indistinguishable from other federal tax revenue. The Social Security money helped to finance wars and other government programs. But none of it went to Social Security. The actual money was replaced with non-marketable government IOUs, called “special obligations of the Treasury.” These IOUs are not at all like the marketable Treasury bonds held by China and other U.S. creditors. They are nothing more than an accounting record of how much Social Security money was spent for other purposes.

    Some members of Congress spoke out against the misuse of the Social Security money more than 20 years ago. The late Senator Daniel Patrick Moynihan (D-NY) was so outraged by the misuse of the Social Security money that he introduced legislation that would repeal the 1983 payroll tax hike and return the system to “pay-as-you go.” Moynihan’s position was that, if the government could not keep its hands out of the Social Security cookie jar, the jar should be emptied so there would be no Social Security surplus. Senator Ernest Hollings (D-SC) felt compelled to warn future generations about the bogus “securities” in the trust fund. During a senate speech on October 13, 1989, Hollings warned that, “in the next century…the American people will wake up to the reality that those IOUs in the trust fund vault are a 21st century version of Confederate bank notes.”

    On March 16, 2011, Senator Tom Coburn (R-OK) uttered the following words during a Senate speech:

    “Congresses under both Republican and Democrat control, both Republican and Democrat presidents, have stolen money from social security and spent it. The money’s gone. It’s been used for another purpose.”

    Every word that Senator Coburn spoke was absolutely true, and all members of Congress, and the President, know that they are true. But the Senator’s public admission that he and his colleagues had “stolen money from social security” got amazingly little news coverage. Probably the only consequence of Coburn’s statement was that, most likely, Senator Coburn was privately chastised by members of both political parties for daring to admit that Congresses and Presidents from both parties had misused Social Security money.

    Some individuals and organizations continue to claim that the Social Security trust fund does hold enough real assets to pay full benefits for another 20 years. But they are wrong. The Social Security Trustees, including the Secretary of the Treasury, the Secretary of Labor, the Secretary of Health and Human Services, and the Commissioner of Social Security are the ultimate authority on the financial status of Social Security. In the Summary of the 2009 Social Security Trustees Report the following definitive statement is made.

    “Neither the redemption of trust fund bonds, nor interest paid on those bonds, provides any new net income to the Treasury, which must finance redemptions and interest payments through some combination of increased taxation, reductions in other government spending, or additional borrowing from the public.”

    If anyone still had doubts about whether or not the trust fund holds real money, President Barak Obama inadvertently set the record straight during an interview with CBS News on July 12, 2011. It was during the stalemate over raising the debt ceiling. President Obama was asked if he could assure the American people that Social Security checks would go out on August 3 as scheduled, even if the debt ceiling dispute was not settled. President Obama said, “I cannot guarantee that those checks go out on August 3rd if we haven’t resolved this issue. Because there may simply not be the money in the coffers to do it.”

    If Social Security had its own bank account with surplus money, why couldn’t the Social Security payments have been paid with that money? Why would Social Security payments be dependent on an increase in the debt ceiling? The answer is that, since 2010, the Social Security tax revenue has been insufficient to pay full benefits. The government had to borrow $49 billion in 2010 and $45 billion in 2011 in order to pay full Social Security benefits. And the amount of money that will have to be borrowed in the future to supplement the inadequate Social Security tax revenue will increase at an increasing annual rate.

    There is no money, or assets of any kind, in the trust fund. The only thing it has is those worthless IOUs that cannot be used to pay benefits or anything else. Every member of Congress and the President have known this basic truth for years. Yet, the vast majority of the American people are still convinced that the money is there. It is a basic fact that all of the surplus Social Security money was spent on other things, as it came in, over the past 30 years. The president and members of Congress know all about the spending of Social Security money for non-Social Security purposes, but the American people know almost nothing about it. The public has both a right and a need to know about the looting of Social Security and the empty trust fund. And they need to know it before any action is taken with regard to changes in benefits. But most politicians do not want the government to have to repay the $2.7 trillion of looted Social Security money. That is why so many are calling for cuts in Social Security benefits.

    There has been a deliberate effort by the government, the AARP, and some other senior organizations, to lead the public to believe that the Social Security surpluses were saved and invested as planned, and that the trust fund now hold enough assets to pay full benefits for more than 20 years, without any government action. But that is a lie. And don’t expect to get much information on the trust fund from the official website of the Social Security Administration. This site is designed to confuse people about the true status of the trust fund. If you can navigate deeply enough into the official site to even find mention of the trust fund you will find a lot of double talk. For example, the site makes the following statement:

    The Trust Funds can hold both regular Treasury securities and special obligation securities issued only to federal trust funds. Currently, all securities in the Social Security Trust Funds are special obligations.

    The Social Security surpluses were supposed to be saved and invested in “regular Treasury securities.” With this statement, the Social Security Administration is admitting that currently there are no regular securities in the trust fund. The only thing it holds is “special obligation securities,” which cannot be held by anyone but the trust funds. These are simple IOUs that are not marketable, and they have no value.

    The government has been pulling the wool over the eyes of the public for the past 30 years. The President and the Congress know that their efforts to hide the looting from the public have been successful. Most Americans have been “programmed” to believe something that is not true. This big lie must be made public. If it is made public, I think it will become a national scandal that might make Watergate pale by comparison

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Dan Caplinger

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

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