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How To Maximize Your Social Security

May 3, 2021 | Social Security

Social security is something that everyone thinks they understand until they consider retirement. Suddenly they find themselves trying to understand benefit amounts and what the right age for retirement is.

For many, social security is their primary foundation for retirement. That’s why it’s so important to understand how it works.

A misconception about social security is that your benefits are set in stone, but that’s not true. It’s possible to increase your benefits.

Here are some tips on maximizing social security so you can get the most out of it.

Maximizing Social Security Means Understanding Your Benefits

If you want to maximize social security benefits, you need to understand how they work. Unfortunately, there are many misconceptions about how social security works.

Maximizing your benefits means understanding what is the right age for you to receive full benefits. It means understanding how benefits are calculated.

If you have received a social security statement in the mail, it should indicate your estimated monthly benefit. Pay attention to what your benefit would be, as well as any benefit that would go to your spouse or minor children.

You can also register an account at You can use their benefits calculator to get an estimate of your benefits.

You Should Work for at Least 35 Years

Many people believe social security benefits are based on their entire work history, but that’s not true. Your payments are based on the income from the 35 highest-earning years of your work history.

The Social Security Administration (SSA) takes the amount you made for your highest-earning 35 years of work history. Then they index them, adjusting for inflation. Then it calculates the average of those 35 years to determine your benefit amount.

If you don’t have a work history of at least 35 years, your benefits will be reduced for every year you haven’t worked. That’s because the SSA will add a zero for each year that you’re short, and average those zero earning years into your benefit amount.

So if you are short of 35 years of work history, consider working for at least 35 years. Otherwise, you are shortchanging yourself of earning years.

Increase Your Income

If you can increase your income, you can increase your estimated benefit amount.

There are a few different ways of doing this. The most obvious would be to ask your current employer for a raise or trying for a promotion that will earn you more money.

If that fails, consider changing jobs. It may be a big transition, but the choice you make now could benefit you in your retirement.

If you are self-employed, consider adjusting your billable hours or the rates you charge for your work. As a self-employed individual, you will be in a unique position to earn more.

Whether you are self-employed or not, another way of increasing your income is by taking on a side hustle or a part-time job. This income can help pad your earnings for the year.

Consider Working Part-Time Until Full Retirement

Many people may not know that they can work and still receive some social security benefits.

In 2021, you lose $1 in benefits for every $2 earned over $18,960. However, if you have reached full retirement age, the limit on your earnings is $50,520. From there, the SSA deducts $1 in benefits for every $3 you earn above that.

The SSA reviews the records of beneficiaries who have wages reported for the prior year. If that previous year is one of your highest-earning years, they recalculate your benefits and pay you an increase.

Wait to Use Your Social Security Benefits

To maximize your social security benefits, you need to work until your full retirement age (FRA). Your FRA is the age at which you will receive 100% or full retirement benefits.  Originally this age was 65, but it has been increased to 67 for those born after 1960.

But you can actually receive more than your FRA if you work longer. The longer you hold off on receiving your benefits, the bigger your payout. Every month after you reach your FRA your monthly payout increases, up until you reach 70 years old.

For each month you delay after your FRA, you will get approximately an extra two-thirds of 1%. After a year, that’s an extra 8% in benefits.

So if your FRA is 67 years old, but you decide to retire a year later, you will get 108% of your monthly benefit amount. If you delay retirement until you are 70, that is a 24% increase.

You can keep working past 70, but you won’t receive any additional social security benefits from delaying your retirement any further.

Best of all, these increases in benefits are permanent, so by working a little longer you can maximize social security benefits.

Avoid Penalties for Retiring Early

Of course, you could go the other way and retire early, but that would decrease your benefit amount. You can start claiming social security at 62. However, your benefit amount may be reduced by up to 30%.

The SSA calculates a benefit reduction of 5/9 of 1% for each month before your normal retirement age. That caps at 36 months. Past 36 months, the benefit is further reduced by 5/12 of 1% per month.

The penalties for claiming before your FRA are permanent. So think carefully before you retire prior to your FRA. If your health is good and you are still able to work, it may be worth prolonging your retirement for a higher benefit amount.

At the very least, you should consider waiting until your full retirement age to collect benefits.

Consult an Expert

Navigating social security benefits and planning for your retirement can be overwhelming. Maximizing social security is only one aspect of wealth management.

In order to retire with the lifestyle you desire, you need to secure a monthly income for your retirement. That means considering social security benefits, long-term healthcare costs, tax planning, and more.

Briggs Wealth Advisors can help. We can work with you to prepare for your retirement, helping you manage your resources so you can get the lifestyle you want.

Contact us to find out how.

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