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3 Ways to Score a Higher Social Security Paycheck

By Sam Swenson, CFA, CPA - Apr 15, 2021 at 6:09AM

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Work through the details and know the numbers to increase cash flow in retirement.

While you're able to claim Social Security benefits at age 62, this may not always be the best option. There are several ways to increase your paycheck if you know what matters most in the SSA's benefit calculation. Here we'll look at three things you can actually do to maximize your monthly checks. 

1. Delay claiming benefits

This is simultaneously the easiest and the most difficult way to secure a higher Social Security check. On the one hand, you don't need to do anything, per se -- but the wait to receive benefits can be torturous in its own right.

You can expect a 30% reduction in your benefits if you take Social Security at 62 versus waiting until your full retirement age. Beyond FRA, you'll increase your retirement benefits by 8% a year until age 70. Beyond 70, waiting longer will not increase benefits. Spousal benefits max out at FRA.

This is not necessarily a recommendation to wait. Many circumstances can lead you to claim benefits earlier, especially if you've had it with the formal workforce and simply want to begin claiming your well-deserved money as soon as possible. It's simply important to note that waiting will work to your financial advantage, and it's worth delaying until at least Full Retirement Age if it works within the boundaries of your life. 

Social Security Card

Image Source: Getty Images.

2. Look into spousal benefits

You are likely eligible for spousal benefits -- or the right to take a portion of your spouse's benefit if it exceeds your own -- if you meet the following criteria:

  • Your spouse has already filed for benefits
  • You've been married for a year or longer
  • You're at least 62 (or if you're younger, you have a child under 16 or a child who is disabled)

Your spousal benefit check will fall between 30% and 50% of your spouse's benefit. To use super simple numbers, say your spouse is entitled to a $2,000 monthly Social Security check. Assuming you qualify given the parameters listed above, your potential benefit would fall in the $600-to-$1,000 range. 

This is all to say that you will only receive the spousal benefit if it is greater than the benefit you would receive based on your own earnings and work history.

Continuing the above example, if you're entitled to $1,500 on based on your own earnings, spousal benefits would be irrelevant to you. However, if you have a limited work history, claiming the spousal option is a viable answer.

3. Maximize your earnings 

During your working career, you'll need to accumulate 40 credits of experience to receive Social Security benefits when it comes time to retire. A "credit" is equal to $1,470 in 2021, and you have the opportunity to earn 4 credits per year; 10 years of continuous work experience will qualify you for benefits.

However, your monthly benefit check will vary based on your average earnings, using your 35 highest-earning years' data. Any years you did not work will cause a "0" to count toward your average. 

The difference between the average benefit and the maximum benefit at Full Retirement Age is significant -- if you earn the maximum amount on which Social Security collects payroll taxes for 35 years, you could potentially get more than double the average benefit at full retirement age.

If you have years left before you plan to file, it pays to earn as much as you can -- not only to boost your net worth now, but to ensure a comfortable annuity down the line. 

Your whole picture matters

The decision to take Social Security payments is a complex one. Many factors go into this decision, both financial and non-financial. Take care to have important discussions with your loved ones regarding your hopes and reams for retirement, and at the same time try to maximize the amount you'll receive in the long run. 

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