Millions of seniors depend on Social Security to pay the bills in retirement, and the more you know about the program, the better positioned you'll be to make the most of your benefits. Here are a few tips that'll help you take full advantage of this key program.

1. Know your full retirement age

Though your Social Security benefits themselves are calculated based on how much you earned during your working years, the age at which you initially file can cause that number to change. In fact, workers are often advised to wait until full retirement age to claim benefits because that's the point at which they'll be eligible to collect those payments in full. Yet nearly 75% of Americans have no idea what their full retirement age is.

Your full retirement age is a function of your year of birth, as follows:

Year of Birth

Full Retirement Age




66 and 2 months


66 and 4 months


66 and 6 months


66 and 8 months


66 and 10 months



Data source: Social Security Administration.

This means that if you were born in 1961, you'll need to hold off on filing for Social Security until age 67 to avoid a reduction in benefits.

Senior couple looking at a tablet

Image source: Getty Images.

2. Don't wait too long to file for benefits

Though waiting until full retirement age to claim benefits is a wise idea, you can get even more out of Social Security if you hold off past full retirement age. In fact, for each full year you delay, you'll accrue credits that boost your payments by 8%. That said, those credits stop accumulating at 70, so once you reach that age, there's no sense in not filing.

3. Prepare to be taxed on your Social Security income

Some seniors -- namely, those without much other income -- don't pay taxes on their Social Security benefits. But if you have additional income sources, like a part-time job or savings, you might wind up on the hook for taxes on a portion of your benefits.

To see whether your benefits will be taxed, you'll need to figure your provisional income, which is your non-Social Security income plus 50% of your yearly Social Security benefit. If that number lands between $25,000 and $34,000 as a single tax filer, or between $32,000 and $44,000 as a joint filer, then you could be taxed on up to 50% of your benefits. Furthermore, if your provisional income is more than $34,000 as a single filer, or $44,000 as a couple filing jointly, then you could be taxed on up to 85% of your benefits.

Additionally, there are 13 states that tax Social Security income to varying degrees:

  • Colorado
  • Connecticut
  • Kansas
  • Minnesota
  • Missouri
  • Montana
  • Nebraska
  • New Mexico
  • North Dakota
  • Rhode Island
  • Utah
  • Vermont
  • West Virginia

Many of these states do offer some sort of income-based exemption, but Minnesota, North Dakota, Vermont, and West Virginia do not. Regardless of where you live, be prepared to pay taxes on those benefits so you're not caught off guard.

4. Don't rely on your benefits alone

The purpose of Social Security is to supplement your senior income -- not provide that income in its entirety. Yet countless workers neglect to save independently for retirement because they assume they'll have their benefits to fall back on, and that's a big mistake. In a best-case scenario, Social Security will replace about 40% of the typical worker's pre-retirement income. Most seniors, however, need double that amount to cover their bills.

The Social Security Administration reports that 34% of beneficiaries count on the program to provide between 90% and 100% of their total income. And those are the folks who are more likely to wind up impoverished in old age.

A better bet? Save on your own while you're still working. At present, you can contribute up to $5,500 a year to an IRA if you're under 50, and $6,500 if you're 50 or older. Employer-sponsored 401(k)s offer even more generous limits: $18,500 a year for workers under 50, and $24,500 for those 50 and above. Even if you can't max out either account type, saving a small amount each year will help you cover your living costs once you're older so that you're not relying too heavily on Social Security alone.

No matter your age, it pays to learn more about Social Security and how it works. At some point in time, you'll likely come to depend on those benefits to some extent, and arming yourself with knowledge today is the best way to maximize them.