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3 Smart Social Security Moves You Can Make Right Now

By Selena Maranjian - Jan 29, 2020 at 9:32AM

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Don't settle for Social Security benefit checks that are smaller than they could be.

Some 64 million Americans collect Social Security benefits, as of 2019, receiving, in aggregate, more than a trillion dollars. That's a big deal, and it might impress you that only about 0.7% of the Social Security budget is spent on administrative expenses.

The Social Security Administration (SSA) is clearly making smart moves -- and you can, too, to maximize the income you get from the program. Here are three such savvy moves.

An older man playing a game of chess

Image source: Getty Images.

No. 1: Get an idea of how much income you can expect

Let's start with expectations, because if you have no idea how much income you can expect from Social Security, you won't be able to plan for your retirement very effectively. The average monthly Social Security retirement benefit check was recently $1,503, or about $18,000 per year. That's just an average, though, and if your earnings have been above average, your benefits will be, too. They still won't be that generous: The maximum benefit for those retiring at their full retirement age in 2020 is $3,011, or about $36,000 per year. (Note that benefits do get adjusted for inflation over time.)

You can find out more precisely how much you can expect to receive by visiting the Social Security Administration (SSA) website and creating a "my Social Security" account. Doing so will allow you to check in at any time to see the SSA's record of your earnings and its estimates of your future benefits.

No. 2: Learn what your full retirement age is

Next, it's smart to know what your full retirement age is, because that's the age at which you're entitled to start collecting the full benefits you've earned. It used to be simple -- age 65 for everyone. But the rules have been tweaked over time, and the table below will show you what your full retirement age is.

Birth Year

Full Retirement Age

1937 or earlier

65

1938

65 and 2 months

1939

65 and 4 months

1940

65 and 6 months

1941

65 and 8 months

1942

65 and 10 months

1943-1954

66

1955

66 and 2 months

1956

66 and 4 months

1957

66 and 6 months

1958

66 and 8 months

1959

66 and 10 months

1960 and later

67

Data source: Social Security Administration. 

Here's a key reason your full retirement age matters: If you start collecting your benefits late (you can start as late as age 70), your benefits will be larger. For every year beyond your full retirement age that you delay, your benefits will grow by about 8%. So, if you delay from age 67 to 70, you can get checks that are about 24% fatter.

No. 3: Understand how to increase your benefits

Knowing your full retirement age is also important when you're deciding when to start collecting your benefits, which you can do as early as age 62 and as late as age 70. That's because starting earlier than your full retirement age will shrink them, and starting later will plump them up. The following table offers the approximate percentage of your full benefits that you'll get depending on when you start collecting:

Age at Which You Start Collecting

Full Retirement Age of 66 

Full Retirement Age of 67 

62

75%

70%

63

80%

75%

64

86.7%

80%

65

93.3%

86.7%

66

100%

93.3%

67

108%

100%

68

116%

108%

69

124%

116%

70

132%

124%

Data source: Social Security Administration. 

There are other ways to increase your Social Security benefits beyond delaying, too. For example, work the formula on which your benefits are based on: It averages your (inflation-adjusted) earnings over your working life, taking data from the 35 years in which you earned the most. So, aim to work at least 35 years to prevent any zeros from entering the calculation. And if you're earning a lot more these days than you ever have, you might work an extra year or two beyond 35 so that a high-earning year can replace a low-earning year.

The more you know about Social Security, the more you'll likely be able to get out of the program, and that can make a big difference to your financial security in retirement.

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