Social security payments are essential for millions of Americans, and maximizing these benefits is a top priority for many, for good reason. There are a range of strategies many use to maximize their benefits, but distilling these tips into three consistent and long-lasting truths is a difficult task.

The thing is, the way social security benefits are calculated allows those entering or nearing retirement the opportunity to change course and move toward optimal payouts in retirement. These three tips are among the three I think are most helpful for those in this stage of life, as they really do allow for excess income which can be the difference between being able to put food on the table and pay for key healthcare expenses, and being forced out of one’s living situation or eating into one’s savings at too fast a rate.

Without further ado, here are the three top tips I’ve come across I think can provide the most value for readers interested in maximizing their social security benefits in retirement.

Key Points About This Article:

• Maximizing one’s social security benefits can be the difference between being able to put food on the table and pay for key healthcare expenses, and being forced out of one’s living situation or eating into one’s savings at too fast a rate.
• Here are three of the top tips I’ve come across for those at this stage in their lives looking to do just that.
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Work for 35 Years

The unfortunate reality that comes with collecting social security payments is that way these distributions are calculated. Retirees are given monthly checks based on a number of factors, including how long they’ve worked in the workforce and the highest earnings they’ve seen over 35 years of employment.

So, as long as retirees can show they’ve worked for 35 years, and can maximize their earnings over that time frame (while waiting until full retirement age (FRA) to claim benefits), the coast should be clear. Of course, that’s not always possible, for a variety of reasons, but finding a way to eke out an additional few years of earnings (even at a lower rate) can substantially increase one’s SSA check in retirement. 

Waiting until full retirement age (around age 67) can help, as claiming benefits sooner than can can result in monthly payments that are up to 30% less, if claimed at age 62. Now, this is again one of those discretionary factors. Health and expectations of how long one will ultimately live play into the calculation. But for those of reasonable health, taking full retirement at the prescribed age is generally the way to go. No one knows how long they have to live, so preparing for a long and vibrant life is the best we can all do.

Combining both strategies—working at least 35 years and waiting until full retirement age—allows you to maximize your Social Security payments. If financially feasible, delaying past your FRA until age 70 further increases your payout, ensuring you receive the highest possible benefit for the rest of your life. Careful planning in these areas can make a significant difference in your retirement income.

Delay Claiming Benefits

Delaying one’s Social Security benefits can be one of the most effective ways to maximize a payout over the long-term. This goes back to my last point, and really works in tandem to working 35 years. Those who are able to do so and wait to take distributions are typically better off over the long-term. This piece is aimed at readers looking to maximize their distribution, so we’re going to do just that. 

Waiting until full retirement age will unsurprisingly give retires the potential to earn the full retirement benefit that’s accrued to them. But importantly, delaying even further (up to age 70) can also result in significant gains over time.

Monthly payments can increase as much as 8% (excluding cost of living increases over time) due to what’s called “delayed retirement credits.” These credits can accrue to a much larger benefit over time, as much as 32% for waiting another three years.

For many, this may be worth it, considering social security payments are adjusted annually for inflation. Think about your personal situation and whether this may be worth it for you. 

Spousal Benefits

Maximizing Social Security spousal benefits involves understanding the rules and timing your decisions strategically. If you’re married, you may be eligible to receive spousal benefits based on your spouse’s earnings record, even if you never worked or have a low earnings history. Spousal benefits can be up to 50% of your spouse’s full retirement benefit.

To maximize spousal benefits, it’s crucial to coordinate claiming strategies. If you file for spousal benefits before reaching your FRA, the benefits will be reduced permanently. Waiting until FRA ensures you get the full spousal benefit amount. Additionally, if your spouse delays claiming their own Social Security benefits beyond their FRA, their benefit increases, which may indirectly increase the spousal benefit if you claim later.

Another strategy is to consider the “restricted application” if you were born before January 2, 1954. This allows you to claim only spousal benefits at your FRA while delaying your own benefit to grow until age 70, maximizing your future payout.

As is the case with other strategies, this option is case-specific. Accordingly, most retirees or those entering retirement may want to talk to a financial advisor before making any decisions. These are just tips to consider, and think about, for those looking for the best possible retirement over the long-term.

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