For some seniors, Social Security is used as supplemental income -- extra money on top of their retirement savings. For others, it's an essential source of income -- one they absolutely can't live without. No matter which camp you fall into, it pays to get as much money from Social Security as you can, and here are four ways to do just that.
1. Know your full retirement age
Though you're allowed to sign up for Social Security starting at age 62, you can't claim your full monthly benefit based on your earnings history until you reach what's known as full retirement age, or FRA. FRA isn't the same for everyone. Rather, it's based on the year you were born, as follows:
|
Year of Birth |
Full Retirement Age |
|---|---|
|
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 or later |
67 |
You'll lose 6.67% of your benefits per year for the first three years you claim them ahead of FRA, and then 5% a year for each year after that. This means that if you're looking at an FRA of 67 and you claim benefits at 62, you'll shrink your Social Security income by 30% -- and that's on a permanent basis.
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2. Delay your filing until age 70
Though FRA is when you're entitled to your monthly Social Security benefit in full, you're also allowed to delay your filing past FRA. Doing so will boost your benefits by 8% a year, and that increase will then remain in effect on a lifelong basis. If your FRA is 67 but you wait until age 70 to sign up for Social Security, you'll grow your benefits by 24%.
3. Don't delay your filing past age 70
The delayed retirement credits that will boost your benefits if you file after FRA stop accumulating once you turn 70. As such, it doesn't pay to delay any longer once you reach that milestone, because in doing so, you'll only create a situation where you lose out on money that could've been yours. That said, the Social Security Administration does pay up to six months of retroactive benefits, so if you forget to claim Social Security at 70 but do so a few months later, you'll still be fine. Just don't wait too long to sign up, or you'll otherwise risk losing out on income permanently.
4. Boost your earnings while you're still working
Your Social Security benefits are based on your specific earnings record, so the more money you make during your 35 highest-paid years on the job (that's what's used in the formula to calculate benefits), the more generous your benefits stand to be. But remember, it's not just earnings from your main job that count in that equation; income you earn from a side gig counts as well. If you have one of those, it pays to ramp up your hours and boost your income to give yourself a higher Social Security benefit to look forward to down the line.
No matter what role you expect Social Security to play in your retirement, it's crucial that you make the most of your benefits. That way, you'll have less financial stress at a time in life when so many people have money issues to worry about.
