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3 Social Security Strategies to Bankroll Your Retirement

By Maurie Backman – Nov 13, 2021 at 5:02AM

Key Points

  • Social Security is an essential income source for many seniors.
  • There are steps you can take to squeeze more money out of Social Security.
  • These strategies could set the stage for a financially healthy retirement.

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Counting on Social Security? Here's how to maximize your benefits.

Even though Social Security shouldn't be your only source of income for retirement, you may come to rely on those benefits pretty heavily once your career wraps up. And so it's in your best interest to get as much money out of Social Security as possible. These savvy moves on your part could result in a higher benefit -- for life.

1. Delay your filing as long as possible

You're entitled to your full monthly Social Security benefit at what's known as full retirement age, or FRA. FRA kicks in at age 66, 67, or somewhere in between, depending on your year of birth.

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You're allowed to claim Social Security as early as age 62, but filing before FRA will leave you with a lower monthly benefit for life. On the other hand, if you delay your filing past FRA, you'll enjoy a higher benefit on a permanent basis.

For each month your filing is delayed beyond FRA, your benefit increases 2/3 of 1%. That amounts to an 8% raise on an annual basis.

Once you turn 70, you can no longer grow your benefit, so there's no sense in delaying your filing beyond that point. But if your FRA is 67 and you hold off on filing until 70, your benefits will be 24% higher.

2. Coordinate with your spouse for instant cash and a boosted benefit

If you and your spouse are each entitled to Social Security, you have a solid opportunity to capitalize. We just learned that delaying your filing will result in a higher payday. But waiting on those benefits could mean having to put off retirement or postpone other goals, like travel.

A better bet, if you're dealing with two sets of benefits, may be to have one spouse claim Social Security at FRA or even before, and have the other spouse delay filing as long as possible. If you go this route, you'll grow one benefit so that it pays more for life, while the other benefit will serve as an immediate income source.

3. Work more than 35 years

The monthly Social Security benefit you're entitled to is based on your earnings during your 35 most profitable years in the workforce. But you can raise your benefit by working more than 35 years.

Chances are, your earnings will be higher at the end of your career than at the beginning. So, say that by the time you've reached age 67, you're earning $100,000 a year, and that sum is much higher than your lowest wage among your top 35 years of earnings. If you extend your career for a year, you'll replace a year of lower wages with a $100,000 income. That could, in turn, leave you with a higher monthly benefit for the long haul.

Even though you may have retirement income outside of Social Security, it's still important to get as much from your benefits as you can. These strategies could lead to a more generous Social Security paycheck -- and more financial freedom throughout your senior years.

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