All you really have to do to claim Social Security is work, wait until you're at least 62, and fill out an application. But if you want to get the largest possible benefit, there's a bit more strategy involved. Here are three steps you should take right now so you can enjoy bigger Social Security checks in retirement.
1. Boost your income
The government bases your Social Security benefit on your average monthly income over your 35 highest-earning years, adjusted for inflation. So anything you can do to increase your income today -- asking for a raise, switching employers, starting a side hustle, etc. -- will help you get larger Social Security checks in retirement.
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There's one exception to this. If you make more than $147,000 in 2022, boosting your income further won't help your Social Security benefit. That's because you only pay Social Security taxes on the first $147,000 you make this year. However, in future years, this limit will probably be higher.
2. Choose your starting age carefully
You must wait until your full retirement age (FRA) to sign up for Social Security if you want the full benefit you're entitled to based on your work history. That's somewhere between 66 and 67 for today's workers. But you can sign up earlier or later if you want.
You become eligible for Social Security at 62, but signing up before your FRA reduces your checks. Those who claim Social Security as soon as they become eligible 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 Social Security increases your checks until you reach your maximum benefit at 70. That's 124% of your full benefit per check if your FRA is 67 or 132% if your FRA is 66. But this doesn't mean it's always in your best interest to delay benefits.
If you have a terminal illness or some other reason to suspect you won't live long, signing up early may actually be the better move for you. Or you might have to sign up early if you need your checks to help you cover expenses.
The important thing is to choose your starting age carefully, weighing the pros and cons of your decision. Signing up at random could cost you in the long run.
3. Coordinate with your spouse
Married couples should aim to maximize their household benefits, which means deciding on the ideal starting age for each person. When both partners qualify for Social Security in their own right, each may claim on their own work record at any time once they turn 62.
But, depending on their income, they may get more from a spousal benefit. This is where you claim Social Security on your spouse's work record and receive up to 50% of their benefit at their FRA. The Social Security Administration automatically gives you the higher of your own benefit or a spousal benefit, but it still pays for you to figure this out for yourself so you know when each person should sign up.
When both people earned similar amounts over their lifetime, both should delay benefits unless they don't expect to live long. But when one person significantly outearned the other, it's more important that the higher earner delays. The lower earner may choose to sign up early to help the couple out financially. Then, when the higher earner claims, the lower earner will automatically get switched to a spousal benefit if it's worth more than their current benefit.
Repeat as necessary
Taking the above steps right away can set you up for larger Social Security checks in retirement, but once may not be enough. You should continually look for new opportunities to increase your income during your working years. And if your plans for retirement change, you should also reevaluate when you and your spouse, if you're married, are going to sign up for benefits.
