There aren't many guarantees when it comes to retirement, but if you worked long enough during your younger years you can count on monthly Social Security checks to help you cover some of your bills. How far they go, though, depends in part on the decisions you make. Here are four things you can do to stretch your Social Security checks as far as possible.
1. Choose the right age to sign up
The size of your Social Security checks is based on how much you earned during your working years and when you sign up. You must wait until your full retirement age (FRA) if you want the benefit you're entitled to based on your work history. This is somewhere between 66 and 67 for most people.
Signing up early shrinks your checks. Those who begin right away at 62 only get 70% of their full benefit per check if their FRA is 67, or 75% if their FRA is 66. Every month you delay benefits increases your checks slightly until you turn 70. That's when you qualify for your maximum benefit. It's 124% of your full benefit per check if your FRA is 67, or 132% if your FRA is 66.
Choosing the right age to sign up can help you maximize your lifetime Social Security benefit. It all comes down to your life expectancy. People who live into their 80s or beyond typically do better if they delay benefits as long as possible, while those with shorter life expectancies are usually wise to start earlier.
But you also have to consider your financial situation. Delaying benefits until 70 may not be feasible if you can't afford to cover all your retirement costs on your own. But you might be able to boost your checks slightly by waiting a month or two longer than planned before signing up.
2. Coordinate with your spouse
Married couples must decide when each person should sign up for benefits if both qualify for Social Security benefits in their own right. Married individuals may qualify for benefits based on their own work records or spousal benefits, which are up to half their partners' benefits at their FRA.
When both partners have earned a similar amount over their lifetimes, both should try to delay benefits as long as possible if they want the largest lifetime benefits. But if one person earns significantly more than the other, it's more important for the higher earner to delay. The lower earner can sign up for Social Security early if need be to help the couple out. Then, once the higher earner signs up, the Social Security Administration will automatically switch the lower earner to a spousal benefit if it's worth more than what they're already receiving.
If you're not sure when it makes sense for each person to sign up, create "my Social Security" accounts and use the calculator there to help you figure out how much each of you can get from the program at various starting ages.
3. Don't sign up until you're retired
It's possible to claim Social Security while you're still working, but it's usually best not to do this if you're under your FRA at the time because you could run into problems with the Social Security Earnings Test.
If you're under your FRA for all of 2022, you'll lose $1 from your Social Security checks for every $2 you earn over $19,560. If you'll reach your FRA in 2022, you'll only lose $1 for every $3 you earn over $51,960 if you hit this amount before your birthday.
Money withheld due to the Earnings Test isn't gone forever. Once you reach your FRA, the Social Security Administration recalculates your benefit to include the money it withheld in years past. That means your future checks will be larger. However, they'll still be smaller than they would've been if you'd just delayed Social Security until you retired in the first place.
4. Claim benefits for all household members
Though rare, other members of your household may qualify for Social Security benefits based on your work record, apart from you and your spouse. Minor or disabled children may also be eligible for benefits, as may stepchildren, grandchildren, or step-grandchildren in certain situations.
Be sure you're claiming benefits for all eligible household members if you want to get the most out of the program. If you're not sure who qualifies, reach out to the Social Security Administration or use the Benefit Eligibility Screening Tool.
If you've thought about the four factors above, you should have a solid claiming strategy in place. But it doesn't have to be set in stone. Check in with yourself and your household members every year or two to see if you need to make any changes to your plan. Adapting your Social Security strategy as you go will give you a more accurate idea of what you can expect from the program and how much you need to save for retirement on your own.