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4 Ways to Boost your Social Security Benefits

Alex LaRosa, CFP®

Alex LaRosa, CFP®

Investment Advisor Representative

March 4, 2019

With the disappearance of pensions and longer life expectancy, social security benefits have become an increasingly important part of retirement planning. So, how can you make the most of your social security? Here is a quick list of four ways you can maximize your benefit.

1. Work Longer

Nobody likes this idea; however, the fact remains that how long you work directly impacts the social security benefit you receive. Social Security benefits are based on the top 35 years of averaged index earnings. Since you are most likely making more money closer to retirement, every year of higher earnings replaces a lower year on the back end.

2. Delay Claiming Benefits

Full retirement age (FRA) is currently 65 or 66 depending on the year that you were born. It is not until this age that you can receive 100% of your benefit. If you were to take it sooner, as early as 62 years old, you would receive a reduced benefit. On the flip side for every year that you postpone claiming benefits beyond FRA up to age 70, your benefits increase 8% (not compounded). So, if you can hold out until the age of 70 you would receive 132% of your FRA benefit representing a 76% increase in social security income for life.

3.Claim Spousal benefits if eligible

Even if you have never worked under Social Security, you may still be eligible to receive a spousal benefit. If you are at least 62 years of age and your spouse is receiving retirement or disability benefits, you can receive up to 50% of your spouse’s benefits.

4. Minimize your Taxable income while taking social security

You can always keep working after you start receiving benefits, however be mindful of how much you make. If you are below your FRA and earn more than $17,040 a year your benefits will be reduced by 1$ for every $2 earned above that amount. If you are at FRA or above, you can earn up $45,360 a year before your benefits start being reduced.

The best strategy for receiving social security benefits will vary from person to person. Factors such as life expectancy, other retirement income and assets, and retirement needs should all be considered. Talk to us, we are here to help.

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4 Ways to Boost your Social Security Benefits

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