There's a common misconception that Social Security benefits are set in stone, but they're not. Whether you're too young to claim, of claiming age but not signed up, or already receiving benefits, there's probably something you can do to increase your checks for the future. Below, we'll look at a few strategies you can use to get the most out of the program.
1. Maximize your income
Your Social Security benefits are based on your average monthly income during your 35 highest-earning years. That means anything you do to increase your income today will also increase your Social Security benefits later. The exception to this is if you earn over $142,800 in 2021. You don't pay Social Security taxes on anything over this amount, so it won't boost your benefits any further.
Even if you can't do much to increase your income today, working at least 35 years could still help your Social Security benefits. People usually earn more later in their careers. If this is the case for you, your higher-earning years will eventually replace your lower-earning years, resulting in a larger benefit.
2. Ensure the government has your information right
The government keeps track of how much income you've paid Social Security taxes on every year in your earnings record, which you can access through your my Social Security account. Check yours every year to make sure its information matches up with your own records.
If it doesn't, submit a Request for Correction of Earnings Record form to the Social Security Administration with any documentation you have proving your real income. This will help you avoid losing benefits because of a clerical error.
3. Consider delaying benefits
While you can sign up to receive Social Security benefits as early as 62, this isn't always the wisest move. Every month you delay benefits increases your checks slightly, at least until you qualify for your maximum benefit at 70. If you wait to sign up, you'll receive fewer checks, but you might get more money overall because each check will be larger.
Whether it's smart to delay depends on your life expectancy and financial situation. If you don't believe you'll make it to your mid-80s or you can't afford to delay benefits, signing up early makes sense. Otherwise, you might get more out of the program by delaying benefits for a few months or years.
Married couples should coordinate with their spouse to decide when each person should sign up for benefits. In the case of major income disparities, the lower earner may choose to sign up early so the higher earner can afford to delay benefits until later. Then, when the higher earner signs up, the Social Security Administration will automatically switch the lower earner to a spousal benefit -- up to 50% of the higher earner's benefit -- if it's more than what they're already earning.
4. Withdraw your Social Security application if it's been less than one year since you signed up
You can choose to withdraw your Social Security benefit application if it's been less than one year since you've signed up. You must notify the Social Security Administration and return any funds it's paid to you or your family members based on your work record.
If you're able to do this, the Social Security Administration will treat you as if you've never applied for benefits. You can wait to sign up again until you're ready, and every month you delay will boost your benefits. However, withdrawing your benefit application is a one-time option, so make your decision carefully.
5. Suspend benefits if you're claiming before age 70
When you cannot withdraw your Social Security application, you may be able to suspend benefits. This is a similar strategy, though you don't have to pay back what you've already received in benefits. You ask the Social Security Administration to stop your checks and you'll accumulate delayed retirement credits. Then, when you want to start again or when you reach 70 and qualify for your maximum benefit, the government will start sending you checks again, which will be larger than before.
But you can only suspend benefits once you've reached your full retirement age (FRA) -- between 66 and 67 for today's workers. If you're not there yet, you may have to wait until you reach this age to use this strategy.
If you suspend benefits, your checks will be larger when you start receiving them again, though they won't be as large as they would've been if you'd just delayed benefits until 70 in the first place. So if you have the choice to withdraw your application, this might be the wiser strategy.
The right strategy for maximizing Social Security benefits will vary from person to person, but it's important to have a working knowledge of all the methods available to you. Your circumstances may change over time, and that could affect how you decide to approach claiming your Social Security benefits. Having multiple strategies in your toolkit will ensure you always know how to pivot to get the most out of the program.