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Read This Before You Take Social Security Benefits

By Selena Maranjian - Mar 12, 2017 at 10:33AM

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How much income you receive from Social Security is not out of your control. There are things you can do to increase your benefit checks -- and strategies to get the most out of the system.

More than 60 million Americans are currently receiving income from Social Security -- and if you're not one of them now, you'll likely be receiving benefits in the future. Your Social Security benefits aren't set in stone, though, and they don't just arrive with no thought or action on your part.

To collect as much as you can from the program, you'll need to be informed. Read this before starting to collect your Social Security benefits.

Hands outstretched toward sky, as money rains down.

Image source: Getty Images.

Find out how much income to expect from Social Security

You can find out how much you can expect to receive in retirement from Social Security at the Social Security website. To give you an initial idea, though, the average monthly retirement benefit was recently $1,363, which totals $16,356 per year. If your earnings have been above average, though, you'll collect more than that -- up to the maximum monthly Social Security benefit for those retiring at their full retirement age, which was recently $2,687. (That's about $32,000 for the whole year.)

It's important to have a handle on what to expect so that you can factor it into your retirement plan. You need to determine how much income you'll need in retirement, how much is likely to come from Social Security, and how you plan to make up the difference -- perhaps via IRAs, a 401(k), dividend-paying stocks, and/or annuity income. If you haven't saved much or enough for retirement, the table below shows how much you might accumulate over various periods:

Growing at 8% for

$5,000 Invested Annually

$10,000 Invested Annually

$15,000 Invested Annually

15 years




20 years




25 years



$1.2 million

30 years


$1.2 million

$1.8 million

Calculations by author.

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Image source: Getty Images.

Think about when to start collecting Social Security benefits

Don't assume that you have to start collecting at 65. The normal (or "full") retirement age for Social Security was indeed 65 for everyone at one time. It has been increased for many of us, though. For those born in 1937 or earlier, it's 65, and for those born in 1960 or later, it's 67. For those born between 1937 and 1960, it's somewhere in between. Despite that, though, you can start receiving benefits as early as age 62 and as late as age 70.

When you start collecting is tied to how big your checks will be. Start collecting at your full retirement age, and you'll receive your full benefits. But for every year beyond your full retirement age that you delay starting to receive benefits, you'll increase their value by about 8% -- until age 70. So delaying from age 67 to 70 can leave you with checks about 24% fatter. If your full benefits would have been $2,000 per month, they would grow to $2,480, a lot more. That's a difference of $5,760 over a year.

Start collecting at 62, and your benefits may be up to about 30% smaller. Note, though, that the system is designed so that total benefits received are about the same for those with average life spans -- no matter when they start collecting. Checks that start arriving at age 62 will be considerably smaller, but you'll receive many more of them.

As you think about when to start collecting, think about whether you're likely to lead a life that's above average or below average in length -- as well as when you expect to really need the income.

On green chalkboard, a graphed line going up, with dollar signs.

Image source: Getty Images.

Increase your Social Security benefits, if you can

The ultimate size of your benefit checks is not tied just to when you start collecting. The formula that the Social Security Administration uses to compute your benefits is based on your earnings in the 35 years in which you earned the most. If you only earned income in 26 years, the formula will be incorporating nine zeros, which will shrink your benefits considerably.

Are you planning to retire after 32 years of work? It might be worth it to work three more years in order to increase your benefits. Even if you've worked 35 years, if you're now earning much more than you have in the past (on an inflation-adjusted basis), you might consider working for another year or two, as each high-earning year will kick a low-earning year out of the calculation.

Consider spousal strategies

If you're married, you have more options when it comes to collecting Social Security benefits than single individuals do. A couple might claim one spouse's benefits early, on time, or late, and do something else with the benefits of the other spouse. Spouses can collect "spousal benefits" based on their partner's earnings history, too -- getting up to 50% of his or her benefits. (Widows and widowers can choose to start receiving 100% of their late spouse's benefit instead of their own, as well.)

One effective strategy for many married couples is to start collecting the benefits of the spouse with the lower lifetime earnings record on time or early, while delaying starting to collect the benefits of the higher-earning spouse. That way, the couple gets some income earlier. Later, when the higher earner hits 70, they can collect extra-large checks.

Also, should that higher-earning spouse die first, the spouse with the smaller earnings history can collect those bigger benefit checks. Note, too, that even divorcees can collect benefits based on their ex-spouse's earnings history -- if they were married for at least 10 years and have not remarried. 

Torn newsprint with question, "Will Your Social Security Be Enough?" and two red dice.

Image source: Getty Images.

Be careful if you're still working...

If you're still working when you start collecting Social Security benefits, they might end up taxed. Taxation happens if your income over a year features not only Social Security benefits, but also significant sums from sources such as wages, self-employment income, interest, or dividend income. You will never be taxed on more than 85% of your Social Security benefits, and if the benefits make up all or the vast majority of your income, you likely won't be taxed on them at all.

Below are the rules, per the IRS and the Social Security Administration. Note that "combined income" here refers to your gross income, plus nontaxable interest, plus half of your Social Security benefits:

  • If you file your federal tax return as an unmarried individual and your combined income is between $25,000 and $34,000, you may have to pay income tax on up to 50% of your benefits. If your combined income tops $34,000, then up to 85% of your benefits may be taxable.
  • If you file a joint federal tax return and your combined income is between $32,000 and $44,000, you may have to pay income tax on up to 50% of your benefits. If your combined income tops $44,000, then up to 85% of your benefits may be taxable.
  • If you're married and file separate federal tax returns, you probably will be taxed on your benefits.

The more you know about how Social Security works, the more you can get out of it -- and that can be critical in retirement, when you're living on a fixed income.

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