Social Security benefits can make a significant difference when it comes to your quality of life in retirement. The average retiree collects around $1,657 per month in benefits, according to the Social Security Administration, which can go a long way during your senior years.
To receive as much as possible, though, it's important to have a strategy heading into retirement. By making these simple moves before your 60th birthday, you can ensure you're maximizing your monthly checks.
1. Check your estimated benefit amount
Even if you're not eligible to file for benefits just yet, you can still get an estimate of how much you're expected to receive each month. To do this, you'll first need to create a free mySocialSecurity account online. From there, you can check your statements to see approximately how much you'll receive in benefits based on your real earnings throughout your career.
Although this move only takes a few minutes, it could have an enormous effect on your retirement. When you know what to expect in benefits, it's easier to determine whether your retirement fund is on track or whether you need to boost your savings rate to retire comfortably.
2. Decide your claiming age
Your estimated benefit amount is what you'll receive if you begin claiming at your full retirement age (FRA). For those born in 1960 or later, your FRA is 67 years old.
You can file for benefits as early as age 62, but by doing so, you'll receive smaller checks each month. If you have an FRA of 67 and you file at 62, for example, your benefit amount will be reduced by 30%. On the other hand, if you wait until age 70 to claim, you'll collect your full benefit amount plus an extra 24% each month.
There's no right or wrong answer as to the right age at which you should claim, and your decision will depend on your personal preferences and situation. Just be aware that the age at which you claim will have a significant impact on your monthly payments, so it's wise to have a plan in place well before you retire.
3. Create a strategy with your spouse
If you're married and your spouse is also entitled to Social Security benefits, it's a good idea to create a strategy for when each of you will claim. Again, there's no wrong answer here, but your decision could affect the rest of your retirement.
Perhaps the two of you want to file at the same time, for example, even if that means claiming at different ages. Or maybe one of you claims earlier while the other delays benefits, giving you both some extra money earlier in retirement, while still taking advantage of those larger checks later on.
While it may not be the most pleasant topic to think about, your lifespans could also affect your decision. When one spouse passes away, the other may be entitled to the deceased spouse's entire benefit amount in survivors benefits.
If you have reason to believe that the lower-earning spouse will outlive the other, it may make sense for the higher earner to delay benefits. If that spouse passes away first, then the survivor may be entitled to a larger benefit amount -- which could go a long way later in life.
Social Security benefits can make for a more financially secure retirement, so it's wise to make the most of them. By creating a plan when you're still a few years away from retiring, you'll be as prepared as possible.