Ida Fuller, first Social Security beneficiary, getting her check. Image: SSA.
This article was updated on May 12, 2016.
When it comes to Social Security benefits, more is always better. Millions of Americans rely on their monthly Social Security checks to help make ends meet, and a substantial portion of them get the bulk of their retirement income from Social Security.
In order to stretch your Social Security dollars as far as they'll go, it's important to make sure you're getting every penny of benefits you deserve. With that goal in mind, let's take a look at three things you can do to make your Social Security check bigger when it comes time to retire.
1. Max out your work history.
The Social Security Administration calculates how big your Social Security check will be by looking at your work history. Specifically, the benefits formula takes the 35 years during which you earned the most after indexing all of your years of earnings for inflation.
If you've worked fewer than 35 years and will claim benefits based on your own work history, then each additional year that you work before you retire automatically adds to your monthly check when you start taking Social Security, regardless of how little you make. The question is more complicated for those who've already worked 35 years or more, as you have to weigh whether your earnings will be higher than your lowest-earning year in the past -- again making sure you take inflation during the intervening years into account. For most people, though, choosing to extend your career will boost your average earnings for Social Security purposes, and make your eventual benefits check larger.
2. Wait longer before taking Social Security.
The other primary way to boost your Social Security check is to claim at a later age. If you're 62 now and would receive a $750 benefit by claiming now, you'd get a much larger check of $1,000 if you wait until age 66 to claim benefits. If you can put off taking your checks until age 70, then you'll get $1,320. Moreover, those figures don't account for the impact of inflation in the interim, so your actual monthly payments will be larger still depending on general price changes.
It's important to understand, though, that, unlike earning more, waiting longer before collecting Social Security doesn't necessarily mean that you'll get more in total over the course of your lifetime. That's because, when you wait before taking benefits, you receive fewer checks during your retirement. Still, if you have the ability to wait, and want the biggest monthly payment possible, the SSA's reward for putting off your Social Security benefits is dramatic for many.
3. Make the most of your spousal and survivor benefits.
Many families tend to approach each spouse's Social Security benefits separately. If you coordinate, however, you can often end up with a bigger total from your Social Security checks.
Unfortunately, some strategies that used to be helpful have disappeared or changed. For instance, with the strategy known as file and suspend, the higher-earning spouse filed for benefits at full retirement age, but immediately chose not to receive them, suspending those benefits instead. If you were the higher earner, then by doing this, you could allow your spouse to collect spousal benefits even as you waited until later to collect your own retirement benefits, allowing your benefits to grow. Similarly, filing a restricted application for spousal benefits allowed you to claim your check based on your spouse's work history, only later choosing to tap your own benefits.
Those wishing to file and suspend had to do so by the end of April 2016. Restricted applications are now only available to those who turned 62 by the beginning of 2016. If you were grandfathered in or took action before the deadlines, then these strategies can continue to make a big difference in what you receive from Social Security.
In addition, divorced spouses can often claim benefits based on an ex-spouse's work history. If you were married for 10 years and haven't subsequently remarried, you can generally make a claim based on the work history of your ex; in some cases, that'll give you a big boost.
Finally, survivors benefits are based not only on your work history, but also when you claim your Social Security. Sometimes, even if it doesn't make sense for you to wait, your family might benefit more from delaying taking your Social Security check.
Everyone wants as much as they can get from Social Security, and getting additional benefits from the program isn't always easy. By following these points closely, though, you might put yourself in a better position to make the most from Social Security.
