Ask Stacy: 7 Things You Need to Know About Social Security

You’ve worked for decades. Now it’s almost time to kick back and start tapping Social Security. Just don’t stumble at the finish line.

Here’s this week’s question:

My husband has been working on his job for almost 30 years and is eligible to retire and draw his retirement from them. He will be 58 years and 8 months old at time of retirement.

He is planning to get another job to work until he can draw his Social Security. So the question is: If he gets a job making less money than his current job, how will that affect the amount of Social Security payments he’ll get when he is old enough to get it? Is there something he needs to do so that his amount of payments from the Social Security will not be smaller payments?

Thank you so very much. I always look forward to your emails and learn a lot from them. — Sandra

Sandra is afraid that by taking a lower-paying job, her husband may receive lower Social Security payments when he retires. That’s a logical fear, but actually the reverse may be true. If he hasn’t yet worked 35 years, his Social Security payments will be higher as a result of his new job.

Here are seven things about Social Security everyone should know:

1. Work at least 35 years

Budimir Jevtic/

Social Security benefits are calculated based on your 35 highest-earning working years. If you work fewer years, you’ll have years with zero income averaged in — which will lower your payout.

2. Make as much as you can


If you experience a jump in salary, you’ll likely boost your future earning potential and may see an increase in your Social Security payments down the road because, as just explained, Social Security takes into account the 35 top-earning years of your career.

3. Wait until full retirement age to claim Social Security

Robert Kneschke/

You can begin collecting Social Security benefits as early as age 62, but you might not want to: If you do, your benefit will be reduced by 25 percent for life. To get your full payment, wait until you reach full retirement age – 66 for anyone born between 1943 and 1954. For those born between 1955 and 1959, the age gradually rises toward 67. For those born in 1960, it’s 67.

4. Better yet: Wait until age 70

Stuart Miles/

If a part-time job will provide enough income to allow you to wait until age 70 to claim Social Security benefits, it’ll pay off.

Thanks to what the Social Security Administration calls “delayed retirement credits,” benefits increase 8 percent each year you delay tapping into Social Security — up until age 70. So waiting until you reach 70 means about a third more income per month.

For those who consider this strategy, it’s particularly beneficial for the higher-earning spouse in a marriage to hold out until age 70 to increase the total benefits the couple will receive. In the event that the spouse with the higher benefit passes away, the surviving spouse will receive a higher survivor benefit.

5. Use online tools


If you’re unsure about the best time to claim benefits based on your individual budget, health, life expectancy or other factors, use online resources to help you decide. A good place to start is, where you’ll get your personalized statement. This estimates what your benefits will be at age 62, at full retirement age, and at age 70.

Once you get estimates for both you and, if applicable, your spouse, there are other online tools that compare your benefits under various scenarios to help you determine the best claiming strategy. Consider AARP’s Social Security Benefits Calculator or Analyze Now’s Strategic Social Security Planner.

There are also a handful of companies that provide a personalized analysis of various claiming strategies. While most charge around $50, a company we partner with, Social Security Choices, sells its product for $39.95. But Money Talks News readers can do even better. Use the coupon code “moneytalks” and you’ll get a $10 discount from the usual price, so you’ll only pay $29.95.

I got one of these reports, and it was really interesting. It revealed that, in order to maximize the lifetime Social Security benefits my wife and I could receive, I should start drawing at age 69. There’s no way I could have figured that out on my own, and the result is potentially thousands of dollars more in benefits.

6. Taking early retirement? Beware outside income


If you work while taking Social Security before reaching your full retirement age, your Social Security payments will be docked — temporarily. After you reach full retirement age you’ll start getting your full checks.

For example, say you turn 62 this year and start taking Social Security. Your full retirement age is 66. Your benefit would be reduced by $1 for every $2 you earned in gross wages or net self-employment income over $15,720. So if you earned $20,720, or $5,000 more than allowed, your benefit would be reduced by $2,500.

After you reach full retirement age, you get your full benefit no matter how much you earn.

Learn more about income limitations here.

7. Do your due diligence


Always read your Social Security statements (either received as paper statements in the mail or online at to be sure everything has been reported correctly. Although inaccuracies are uncommon, some scenarios lend themselves to a greater chance of error — such as a name change your employer failed to update on company records.

Got a question you’d like answered?

You can ask a question simply by hitting “reply” to our email newsletter. If you’re not subscribed, fix that right now by clicking here.

The questions I’m likeliest to answer are those that will interest other readers. In other words, don’t ask for super-specific advice that applies only to you. And if I don’t get to your question, promise not to hate me. I do my best, but I get a lot more questions than I have time to answer.

Got any words of wisdom you can offer for this week’s question? Share your knowledge and experiences on our Facebook page.

About me

I founded Money Talks News in 1991. I’m a CPA, and over the years I’ve also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate. Got some time to kill? You can learn more about me here.

Got more money questions? Browse lots more Ask Stacy answers here.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
It’s Worth Paying Extra for These 14 Items

Here’s where to find the sweet spot at the intersection of price and quality.

Avoiding These 5 Foods Could Save Your Vision as You Age

Millions of Americans may be able to prevent an incurable cause of blindness by making a basic change.

3 Easy Ways to Get Laundry Soap for Nearly Nothing

Not using any of these methods for saving on laundry detergent? Then, you are washing money down the drain.

12 Easy Ways To Make Make Money Online Without Leaving Home

If you’re hanging around the house a lot these days — and who isn’t? — use your time to make some extra cash.

5 Ways Retirees Can Lower Their Income Taxes

Here’s how to keep Uncle Sam’s mitts away from your nest egg.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

8 Tips for Retiring Comfortably on Social Security Alone

It’s never too early to start learning how to live well while living on less.

Am I Eligible for My Mother’s Social Security Benefit?

Can an adult daughter tap into her late mother’s benefit?

11 Generic Products You Should Buy at Costco

Not all generics are worthwhile, but these are among the best from Costco’s Kirkland Signature brand.

9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

This Surprise Factor Can Raise Your Risk of Dementia

Nearly half of U.S. residents may face this threat.

3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

Organize Your Home With These 10 Thrift Store Finds

Resolve to be clutter-free in 2021 with these secondhand purchases.

This Gas Station Scam Is Victimizing More Drivers

For the second straight year, a growing number of Americans believe they’ve fallen prey to this scam.

11 Laws You Could Be Breaking Without Knowing It

Seriously? Fibbing about the weather is a crime? This and other little-known legal traps await the unwary.

6 Legal Documents Retirees Need — but Don’t Have

Few retirees have all of these documents that are crucial to their golden years — especially during a pandemic.

These Are the 3 Best Used Cars You Can Buy

These vehicles boast reliability, safety and long-lasting value.

Can a Divorced Widow Claim Her First Husband’s Social Security Benefits?

The rules are complicated when it comes to eligibility for survivors benefits.

27 Things You Should Never Pay For — and How to Get Them for Free

When you know the tricks, you can save big on all kinds of useful things that others pay for.

15 Amazon Purchases That We Are Loving Right Now

These practical products make everyday life a little easier.

13 Things Seniors Can Get for Free — or Almost Free

There are many ways to get cheap or free services and goods after reaching a certain age.

Internet Providers Can’t Charge You for This Anymore

Starting this month, your ISP no longer can bill you for this fee.

10 Things I Always Buy at Trader Joe’s

From snacks to sweets to side dishes, stock your cart with these time-tested favorites on your next TJ’s run.

9 Small Expenses That Are Bleeding Your Budget Dry

Keep more of future paychecks by eliminating these budget-busting unnecessary expenses.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.