Social Security plays an important role in retirement planning, but many people miss out on opportunities to maximize their benefits. Whether you’re close to retirement or years away, there are strategies that can help you get the most out of your savings.
Here are 7 Social Security hacks you need to know to boost your benefits and protect your financial future.
1. Claim Spouse Benefits
Married couples can use spousal benefits to increase their Social Security income. If you’ve been married for at least one year, you may be eligible to receive up to 50% of your spouse’s Full Retirement (FRA) benefit if your Social Security benefit is low. This option can provide you with additional income, even if you have never worked.
These benefits do not reduce your spouse’s payments, so they are an additional benefit for your family.
Widows and widowers may be eligible for survivor benefits, which can provide up to 100% of the deceased spouse’s benefit.
2. Use the “Limited Action” Strategy
If you were born before January 2, 1954, you can use a little-known strategy called a restricted application. This allows you to receive spousal benefits while delaying your retirement benefits until age 70.
By claiming spousal benefits first, you can still earn income while maximizing your benefits. Not everyone qualifies, but those who do can significantly increase their total lifetime payments.
Pro tip: If you have more than $100,000 in savings, get advice from a professional. SmartAsset offers a free service that matches you with a vetted, trusted advisor in less than 5 minutes.
3. Delaying Claiming Your Benefits
One of the best ways to maximize your Social Security benefits is to delay claiming them. Although you can start receiving benefits at age 62, doing so reduces your monthly check permanently. Waiting until you reach your full retirement age (FRA) or until you are 70 can significantly improve your monthly payments.
Every year you delay applying for your FRA, your benefits increase by 8%. That’s like giving yourself a guaranteed raise, which makes it worth the wait if you can afford it.
4. Increase Your Earning Years
Social Security calculates your benefits based on your highest 35 years of earnings. If you worked for less than 35 years, zeros are counted in the calculation, which lowers your benefit. Consider working extra years to replace those zero high-earning years to increase your payments.
Even if you’ve worked for 35 years, earning more in your later years can still increase your benefits by shifting the low-earning years into the equation. Every dollar earned counts.
5. Be aware of the Salary Limit
If you claim Social Security benefits before reaching your full retirement age and continue to work, your benefits may be reduced if you exceed the annual income limit. In 2024, the income limit is $22,320.
However, once you reach the FRA, the income limit disappears, and any reductions are recalculated, restoring some of what was lost. Understanding this rule can help you make informed decisions when you plan to work while receiving benefits.
6. Don’t Forget Income Taxes
Many retirees are surprised to learn that their Social Security benefits are tax-free. If your combined income (total adjusted income + tax-free interest + a portion of your Social Security benefits) exceeds certain limits, up to 85% of your benefits are tax-free.
To minimize taxes, consider strategies such as withdrawing from retirement accounts such as 401(k)s or IRAs before claiming Social Security or changing sources of income. Proper tax planning can help you keep more of your benefits.
7. Take Advantage of Separated Spouse Benefits
If you’ve been married for at least 10 years and are now divorced, you may qualify for spousal benefits based on your former spouse’s earnings record—without affecting their benefits. Even if your ex remarries, this option is always available to you.
A divorced spouse’s benefit can give you a benefit of up to 50% of your ex-spouse’s FRA, which can be higher than claiming your own benefits. It’s an often-overlooked opportunity that can significantly increase your retirement income.
Pro tip: Tax debt is a burden, but there is professional help available to fight the IRS. Check out the top tax assistance companies here.
Make the Most of Your Social Security Benefits
Maximizing Social Security isn’t just about when to apply—it’s about understanding the laws, strategies, and opportunities available.
By delaying benefits, exploring married and divorced options, and paying attention to taxes and income limits, you can maximize your lifetime payments and achieve a more comfortable retirement.
These hacks may seem small, but they can have a big impact on your financial future. Start planning today to make the most of every Social Security dollar.
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