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15 Ways to Squeeze Every Penny Out of Social Security

Author: Christy Bieber | September 17, 2021

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A valuable income source

Social Security is one of the most valuable income sources retirees have for two simple reasons. Benefits are protected against inflation because periodic cost-of-living adjustments are built into the program. And benefits are guaranteed to last for life.

Because Social Security is such an important source of retirement funds, it makes sense to try to maximize your benefits. Fortunately, following these 15 simple steps can help you to get every dollar you can out of Social Security.

The $17,166 Social Security bonus most retirees completely overlook
If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $17,166 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.

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1. Negotiate your salary throughout your career

When you retire, your Social Security check is calculated using average earnings over your career. That means the more you earn, the bigger your benefit.

If you're hoping to get the most money you can from Social Security, you'll need to be aggressive about improving your income over your entire working life.

Ask for raises at performance reviews, negotiate your salary when you get hired, and look for a new job if you are being underpaid.

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2. Consider a side job

Working an additional job is another way to boost your income that counts toward determining your Social Security benefit.

If you can pick up a side gig on weekends or evenings, you can earn more and thus get a larger retirement benefit in your later years.

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3. Check your earnings record annually

Social Security keeps a record of your annual earnings, which is what the program uses when determining your average benefit.

Obviously, you want to make sure that record is accurate so you get credit for everything you've earned. Be sure to sign into your Social Security account at least once a year to check that your earnings were reported properly.

ALSO READ: Have You Checked Your Social Security Earnings Record Lately?

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4. Understand how benefits are calculated

Social Security is a complicated benefits program, and if you don't understand it, you're more likely to inadvertently make a mistake that undermines your ability to maximize your benefits.

To make sure you avoid costly errors, read up on how Social Security benefits are calculated so you can always make the most informed choices when making decisions about your retirement income.

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5. Work for at least 35 years

When Social Security calculates your benefit based on average wages over your career, it always makes this calculation using a 35-year work history.

It means that, while you can become eligible for benefits after working just 10 years, you will see your Social Security income reduced if your career doesn't span the full 35 years that gets factored in.

If you work less than the full 35 years included in your average, your benefits will be lower because some years of $0 wages will be included in your benefit calculation.

The $17,166 Social Security bonus most retirees completely overlook
If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $17,166 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.

Previous

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6. Consider working for even longer than 35 years

Most likely, as you near the end of your career, you'll have moved up in the job and your salary will be higher than it was during some of the earlier years you worked. This is especially true if there were any years when you worked just part of the time.

If you work for longer than 35 years, you may be able to raise your Social Security benefit by changing which 35-year period is included in the calculation of your average benefit.

Each additional year you work at a higher salary will push out one lower-earning year, thus increasing your retirement benefit.

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7. Understand spousal and survivor benefits

If you are married, maximizing your Social Security benefits becomes a lot more complicated. That's because you may be entitled to spousal benefits based on your spouse's work history, or survivor benefits if your spouse has passed away.

Decisions that you and your spouse make about claiming benefits can affect the amount of both spousal and survivor benefits. For example, if a higher-earning spouse starts his or her checks early, this could reduce how much the surviving partner gets.

Be sure you understand how both spousal and survivor benefits work and coordinate with your spouse before either of you file for Social Security benefits.

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8. Delay your divorce

Spousal and survivor benefits aren't just available to people who are currently married. You can also get these benefits based on an ex's work record -- as long as you were married for at least a decade.

If you could earn more Social Security by claiming spousal or survivor benefits and you are thinking about ending your marriage, consider being strategic about the timing. If you're close to hitting the 10-year mark, see if you can put off signing the papers until you do.

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9. Know your full retirement age

Every Social Security recipient has been assigned a full retirement age (FRA), which is based on birth year. This is between age 66 and two months and age 67.

Your full retirement age determines when you can claim your standard benefit, as well as how much benefits would shrink by claiming early or increase if you delay your claim. Unfortunately, many people don't know what their FRA is.

Be sure you know yours before you consider claiming benefits so you don't pass up the chance to maximize your Social Security income.

ALSO READ: What Is Full Retirement Age and Why Does It Matter?

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10. Calculate your break-even point

Retirees can start benefits at 62, but that's before full retirement age. Delaying a benefits claim results in a larger benefit because you avoid monthly early filing penalties. Once you've hit full retirement age, you can delay still further and claim delayed retirement credits, which continue increasing monthly benefits until 70.

Of course, the longer you wait to claim benefits, the more income you miss that you could've received. You'll need to figure out how much income you're forgoing, as well as how much extra money you get each month by delaying. Then, calculate how long it will take for your extra monthly benefit to make up for the missed checks.

This is called your break-even point, and you need to know it when deciding when to claim Social Security.

The $17,166 Social Security bonus most retirees completely overlook
If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $17,166 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.

Previous

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11. Be strategic about when you claim your benefits

Knowing your break-even point helps you make a strategic choice about the best age to start your benefits.

See, if you don't think you'll live long enough to break even due to your current health or genetic history, then you can get more money from Social Security by claiming benefits ASAP.

But if you believe you'll outlive your life expectancy and live beyond your break-even point, waiting makes sense for you.

ALSO READ: Claiming Social Security at 67? You May Need to Rethink That

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12. Be prepared to delay your benefits claim

For a small majority of retirees, waiting until 70 to claim Social Security benefits is the best way to maximize lifetime benefits. If you want to delay the start of your checks, though, you need to be prepared to support yourself while you're waiting.

Most people can't wait until 70 to leave the workforce, however. So if you want to get the most money possible from Social Security, you likely need to be sure you have enough supplementary savings to make a delayed benefit claim possible.

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13. Know the rules for working while on Social Security

If you are planning to work after you claim Social Security, you need to know how this could impact your benefit checks.

If you've already reached your full retirement age, you can work as much as you want and your retirement income won't be affected. But if you're under FRA, you could temporarily forfeit benefits if you earn too much.

Eventually, you get back forgone benefits if you lose checks due to working -- but it takes time. So make sure you understand this before you get a job as a senior.

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14. Invest in a Roth IRA

If you earn too much money as a retiree, Social Security benefits become partly taxable. In fact, you could owe tax on as much as 85% of your benefits.

But only certain income counts in determining if you must give the IRS a cut of your Social Security checks. Distributions from a traditional 401(k) or IRA count, but not those from a Roth.

So if you want to make sure you keep all your Social Security money instead of giving the government a cut, consider investing in a Roth as you prepare for your later years.

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15. Retire where benefits aren't taxed

Finally, it's important to choose your retirement location carefully. That's because 13 states tax Social Security benefits. If you want to get every dollar you can from your retirement income, make sure you live in a place where the state won't take any of your money.

The $17,166 Social Security bonus most retirees completely overlook
If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $17,166 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.

Previous

Next

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Now you know how to maximize your Social Security checks

Now you know the secrets to getting the most money you can from Social Security. Start taking as many of these steps as you can today so you can get a generous retirement income in your later years.

Just remember, even if you maximize your Social Security benefits, you'll likely need additional savings to support you -- so be sure you have a comprehensive financial plan for the future.

The Motley Fool has a disclosure policy.

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