This Secret Social Security Strategy Is Worth $10 Billion a Year

Social Security is a key part of your financial security in retirement, but many people leave valuable benefits on the table because they don't know about them. By knowing some obscure rules, you can earn more from Social Security.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, talks about a little-followed strategy that could be worth $10 billion annually to eligible Americans. As Dan notes, people are eligible to take spousal benefits when they reach full retirement age, giving them the chance to claim those benefits while delaying taking benefits on their own work history until as late as age 70. Doing so can add 32% to your own retirement benefit while letting you get money at an earlier age, with one study showing that the strategy can add 3% to your lifetime take from Social Security. Overall, that adds up to as much as $10 billion that the Social Security Administration could have to pay if more people used the strategy. 

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Read/Post Comments (18) | Recommend This Article (73)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 18, 2014, at 11:26 AM, ghelmz21 wrote:

    Not to worry, the Chinese can lend us enough to offset this!

  • Report this Comment On January 18, 2014, at 11:49 AM, VegasSmitty wrote:

    This is our bi-weekly SS propaganda. Take the money as soon as you are eligible!

  • Report this Comment On January 18, 2014, at 12:11 PM, Waldo wrote:

    We want you to continue working until you die. THAT should be the headline. 70? I retired at 55 and will take SS at 63. At least that way I won't croak 2 years after my 70th birthday like they want me to.

  • Report this Comment On January 18, 2014, at 12:22 PM, djm20 wrote:

    This works in this example: you and your wife are both 66, the current full benefit SS retirement age. You are both eligible for SS benefits on your own record, but one of you will earn much higher benefits. The lower earnings spouse can elect to 'go on the record' of the higher earning spouse and earn 1/2 that spouse's SS benefits until they are 70. The lower earning spouse then 'applies and suspends' their SS payments and earns the 7% increase each of 4 years and opts to go on their own record when they turn 70 thus maximizing their earning potential.

    Any other option is foolish.

  • Report this Comment On January 18, 2014, at 12:24 PM, syzygysyzygy wrote:

    regardless always take the money as soon as you can because you cant trust this immoral govt one whit

  • Report this Comment On January 18, 2014, at 12:28 PM, mothra85 wrote:

    been there and done that , but I also worked til age 84 yrs 11 months and 3 days of age , After age 70 you can work parttime and make the difference between what you get and $30,000 before you have to payany income tax on any of your SS. also every year you work past 70 your SS is refigured and an increase. This is for the older folk born in the era when we work Top wages $13.00 weekly. All of your income must reach $30,000 before your SS is Taxable . I took SS on my on account at age 70 , because SS Adm made me

  • Report this Comment On January 18, 2014, at 1:06 PM, Bennymac wrote:

    This only works when one member of the married couple has a PIA (Primary Insurance Amount) or Full Retirement Age benefit less than half the other member of the couple. With both man and wife working these days in this inflation-ridden world of ours, it doesn't happen very often. Somebody that works for the SSA.....needs to enlighten Danny boy a bit. Keep in mind too that you do maximize your Social Security by waiting until age 70 to take full advantage of all DRC's (Delayed Retirement Credits). But, and this is a big one, you might consider the average life span of your parents and other relatives. If most of your family lives long with no diseases, it might be a worthy gamble. Otherwise, it's crap. I don't buy the dollar figure amount used in this article for one second either. Show me some stats, or are these FauxNews statistics????

  • Report this Comment On January 18, 2014, at 1:16 PM, billsmith1900 wrote:

    Is this the same info that the radio advertisers are selling for $20?

  • Report this Comment On January 18, 2014, at 4:32 PM, JePonce wrote:

    Would that not in effect drive up social security taxes or be covered by increasing taxpayer debt?

  • Report this Comment On January 18, 2014, at 8:41 PM, Haasyboy wrote:

    I work for SSA. One spouse's PIA does not have to be less than one-half of the other spouse's in order to employ this strategy to draw spouses benefits at FRA (Full Retirement Age).

  • Report this Comment On January 19, 2014, at 12:21 AM, sonnyincr wrote:

    I find it most interesting that people desire to "collect" as soon as they can, but yet complain about the corrupt and wasteful government. They complain about "socialism" taking over the country, yet are first to feed at the trough of the most socialistic program in the US.

  • Report this Comment On January 19, 2014, at 8:45 AM, Bshaef wrote:

    This is not a "hidden" benefit. I applied for SS at age 66 and a SS worker called me from California and said I could choose to take my first wife's benefit (we were married for 13 years before divorce and she died at age 65 and never remarried) until age 70 and then I could draw the full age 70 benefit based on my wages. Furthermore the first payment was retroactive to my 65th birthday. I think the SS administrative group is a first class organization. Everyone I've been in contact with has always been very helpful. Sometimes though it seems like they are overwhelmed with Medicaid recipients.

  • Report this Comment On January 19, 2014, at 9:46 AM, RegLB wrote:

    Wish I known this 2 years ago... I was lay off and couldn't find any work, and my unemployment expired so had no choice to ask for early S.S....

    Ended up loosing 25%, so now had to take a part time job to keep me afloat... I though I be enjoying a better life...

  • Report this Comment On January 19, 2014, at 10:43 AM, BooHoo wrote:

    sonnyincr couldn't have said it much better. People need to learn to accept the choices they make in everyday life. There are no redo's why get upset and try to blame other people or the government for the wrong choices we make as individuals. If an individual saved $5.00 per week from the age of 25 till the age of 62 at 4% interest the amount would be $21933.00 depending on ones pay into SSI that is more than one year of SSI income, $5.00 per week for a year of income or 4-20oz bottles of soda at a convenience store or 2 packs of cigarettes per week its all about choice but don'e blame anyone.

  • Report this Comment On January 19, 2014, at 12:04 PM, FireBreather wrote:

    I'm 10 years older (woman) than my former spouse. I found out I can't collect off of his SS until he retires...I would be 75 y/o. I was a Stay-at-Home mother and lost 15 years of Benefits into SS......Damned if you do and Damned if you don't...Ladies.... Get a's still a man's world.

  • Report this Comment On January 19, 2014, at 3:34 PM, govtisscum wrote:

    Sonnyincr - Some people don't have the luxury of being able to make it to full retirement age. Mostly because they're usually laid off by their sorry companies they work for before they reach that age. You try getting a job at age 62 or older. Young people and people with degrees can't even find a job now.

  • Report this Comment On January 19, 2014, at 8:05 PM, anno wrote:

    I took early retirement at 62 and qualified for widows benefits. Upon reaching 65 I then had to stop the widow benefits and collect my own SSA. So glad I retired early as I have been collecting now for 15 years. Probably have collected more than I ever contributed. Still it is very difficult to try to live on SSA. You just do what you have to do to survive though even though that means not having all the luxuries your friends have. At least I do have fairly good health plan since I worked for government and kept that coverage. I ended up paying more for medicare than most people as my health insurance company told me I didn't need to apply for that at 65 since I had coverage through them. A year later I find out they were wrong and so I am paying for it now.

  • Report this Comment On January 24, 2014, at 3:57 PM, EJE38 wrote:

    I think there are alternate ways SS can provide benefits as well - depending on circumstance..

    I am 75 and have drawn SS benefits, starting at full retirement for the past eight years.

    My wife is 61 and will reach full retirement at age 66. We plan to have my wife take her SS at 62 which will be about half of mine , and we will use the SS income from both of us until I die.

    (Assuming I die first and she is at least 66).

    Then, my understanding of SS policy, is that my wife will abandon her SS and take mine for as long as she lives. Is that the way SS will work for us? I believe the opportunity exists because the policy is -the surviving spouse is entitled to receive either spouse's benefit for as long as he/she lives , but cannot take both after one of them dies.

    That's kind of the reverse way SS works in our case from the example provided in the article, in that we receive extra income by taking the wife benefit early.

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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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