Please ensure Javascript is enabled for purposes of website accessibility

3 Ways to Make Your Social Security Benefits Bigger

By Wendy Connick - Oct 20, 2017 at 7:38AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Want to get a bigger Social Security check? Try one (or more) of these handy-dandy tricks.

The bigger your Social Security benefits are, the less income you'll need to generate from other sources such as your retirement savings. This can be particularly important if you are behind on saving for retirement, or have suffered some unfortunate losses from your investments. Fortunately, there are ways to increase your Social Security benefits both during your working years and after you retire.

Delayed retirement credits

You can claim your Social Security benefits as early as age 62, but doing so comes at a price. Claiming your benefits before you reach "full retirement age" results in a reduction of your benefit checks for the rest of your life. On the other hand, waiting until after full retirement age to start receiving benefits will make your benefit checks larger, thanks to the addition of delayed retirement credits. If you wait until age 70, you'll max out said credits. In fact, people with a full retirement age of 67 (which would be everyone born in 1960 or later) would increase their Social Security benefits by 24% if they waited until age 70 to claim them.

Social Security card and statement

Image source: Getty Images.

Roth IRA

Did you know that your Social Security benefits may be taxed? If you have sufficient taxable income from other sources, up to 85% of your Social Security benefits could be taxed at your federal income tax rate. This could result in a significant reduction of the Social Security benefits you get to keep each year.

To keep your Social Security benefits from being taxed, it's important to get as much of your retirement income as possible from nontaxable sources. The Roth IRA is the easiest way to convert your retirement savings into a nontaxable source of income. Ideally, you'll contribute to both a traditional retirement savings account and a Roth IRA during your working years, so that you'll have a significant percentage of your money in the Roth IRA; then you can plan your retirement savings withdrawals to keep your taxable income below the Social Security taxation threshold each year.

If you weren't able to build a significant balance in a Roth IRA before you retired, all is not lost -- you can still do a Roth conversion, taking a portion of the money in your traditional IRA or 401(k) and transferring it to a Roth account. However, you'll have to pay taxes on the money you move over to the Roth account when you file your tax return for the year. If you're moving over a large amount of money, this can result in a horrifically high tax bill. You can reduce the hit to your income by splitting the conversion out over several years instead of doing it all at once.

Survivor and spousal benefits

Your Social Security benefits may be significantly larger if you take advantage of some of the other programs that the agency offers. Widows and widowers can claim survivors benefits based on their deceased spouse's earnings; waiting until your full retirement age to claim those survivors benefits means you could receive 100% of the Social Security benefits that your spouse had earned. If your spouse's income was higher than your own, this could be a significant improvement.

If your spouse is still alive and had significantly higher lifetime earnings than you did, then spousal benefits may be a better deal for you than your own benefits. Spousal benefits can be as much as 50% of your spouse's regular Social Security benefits. If your spouse has already applied for Social Security at the time you apply for benefits, you'll be automatically granted spousal benefits if they would be higher than your own. Otherwise, you'll need to file a claim specifically for spousal benefits to be considered.

Believe it or not, if you're divorced you may still be eligible for survivors or spousal benefits through your former spouse. If your marriage to your former spouse lasted at least 10 years and you're now unmarried and 62 or older, and your ex is entitled to Social Security benefits, you can file a claim for benefits based on his or her earnings. That's one way to get a lasting legacy from your former marriage.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
311%
 
S&P 500 Returns
110%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/02/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.