6 Insider Tips for Getting the Most From Social Security

This story originally appeared on NewRetirement.

Mary Beth Franklin is a nationally recognized expert in Social Security claiming strategies and a frequent public speaker. And she literally wrote the book (“Maximizing Social Security Retirement Benefits“) that retirement planning experts use to advise clients on Social Security.

She offers you her Social Security expertise with several insider tips for getting the most from Social Security.

1. Claiming at 62 means a big reduction in retirement income

Mary Beth does not mince words on this guidance, “It’s critical that people understand that although they can claim Social Security benefits as early as age 62, their benefits will be permanently reduced for the rest of their life if they do.”

“For married couples, it also means a possible reduction in survivor benefits for the remaining spouse,” she adds. “And if you collect Social Security benefits early and continue to work, your benefits could be temporarily reduced or eliminated.” The SSA takes this bite out of your benefits if you earn more than $18,240 in 2020. Benefits lost to the earnings cap are added back into your checks at full retirement age.

Getting the most from Social Security means waiting to start benefits. The only true exception to this rule is if you know that you will not live very long.

2. Take time to compare early retirement benefits with full retirement benefits

It is surprising how many people start benefits without actively comparing the monthly income for starting early versus starting later.

Mary Beth suggests that you “know how much your benefits would be worth if you claimed now compared to waiting until your full retirement age (FRA), which is 66 for anyone born from 1943 through 1954.

“Consider whether you can afford to wait until age 70 to claim Social Security when benefits are worth the maximum amount. For every year you postpone claiming beyond FRA up to age 70, your benefits would grow by 8% per year, possibly boosting your retirement benefit to 132% of your FRA amount.”

3. Claiming early causes regret

In response to the question, “What are the biggest regrets you hear from people who have already claimed Social Security?” Mary Beth says: “Many retirees regret that they claimed reduced Social Security benefits as soon as they could at age 62, but often it was unavoidable because of health issues or job loss.”

4. You can change your mind if you claimed too early

Not everyone knows this and the rules are tricky, but Mary Beth says that “anyone can change their mind and withdraw their application for benefits within 12 months of first claiming.”

Although they must repay any benefits they have received, as well as any benefits collected on their earning record by a spouse or minor dependent child, it would allow them to collect a bigger benefit in the future.

“If they miss the 12-month window, they can wait until 66 to suspend their benefits,” she says. “Although they would not be able to collect any benefits during the suspension period — and no family members such as a spouse or dependent child could collect any benefits on their earnings record during that time — they would be able to earn delayed retirement credits worth 8% per year up to age 70.”

5. Social Security representatives often give bad advice

The Government Accountably Office (GAO) did a study that found Social Security representatives do not fully understand all the rules and all too often give incorrect guidance to people who have questions about their benefits.

“With more than 2,700 rules that govern Social Security benefits, it’s not surprising that some Social Security Administration reps don’t always get it right,” Mary Beth says. “The best solution is to know your rights before you apply for benefits, including the possibility that you may be able to switch between collecting spousal benefits first and retirement benefits later or to be able to choose when you claim survivor benefits vs your own retirement benefit.”

If getting the most from Social Security is important to you, you might not want to merely trust what the SSA has to say.

6. When you start benefits impacts your spouse as well

“A maximum retirement benefit also translates into a maximum survivor benefit for surviving spouses or eligible ex-spouses who were married at least 10 years before divorcing.”

If you like the preceding tips, be sure to listen to Franklin’s interview with Steve Chen, founder of NewRetirement, for even more great ideas for maximizing your benefits.