Making the most of your Social Security benefits can add substantially to your retirement income, yet many retirees overlook key strategies. Understanding when to claim and how to optimize benefits can make a significant difference.
Beyond maximizing Social Security, cutting everyday expenses is another way to stretch retirement dollars. Here are six Social Security tricks that could substantially impact your retirement income.
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1. Delay claiming to maximize your monthly benefit
You’ve likely heard that delaying your claim to Social Security benefits is smart. Still, many people don’t create a plan to delay retirement, forcing them to take Social Security earlier than is ideal.
Delaying Social Security—especially for higher earners—can be beneficial with careful planning. For example, a $3,000 monthly benefit at age 67 could grow to $3,720 at age 70, adding $8,640 annually. Even a one-year delay can make a significant impact.
Diversify your investments with tangible assets like gold bars and coins, which offer liquidity and security. Investors allocating up to 10% of their retirement portfolio to physical assets often feel more confident delaying Social Security claims.
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2. Leverage the 62/70 split strategy for married couples
Married couples have a unique opportunity to maximize their combined benefits through careful coordination. The “62/70 split” strategy works like this: the lower-earning spouse claims benefits early at 62, while the higher-earning spouse delays until 70.
This approach provides some retirement income earlier while allowing the more significant benefit to grow. Since survivor benefits are based on the higher earner’s benefit amount, this strategy maximizes protection for the surviving spouse.
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3. Take advantage of the do-over option if you claimed too early
Did you claim benefits early but now regret the decision? Social Security offers a little-known “do-over” option through Form SSA-521, allowing you to withdraw your application within 12 months of first claiming.
This strategy requires repaying all benefits but resets your claiming status, allowing benefits to grow as if never claimed—potentially adding thousands to your lifetime retirement income.
This strategy is ideal if your finances improve after claiming. For example, someone who claims at 62 but returns to work could increase lifetime benefits by over $100,000 by delaying until 70.
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4. Use restricted applications if you qualify under the grandfather clause
If born before January 2, 1954, you may qualify for a “restricted application,” allowing you to claim spousal benefits while letting your retirement benefits grow until 70—potentially maximizing lifetime earnings.
This strategy was largely eliminated by the Bipartisan Budget Act of 2015, but those who meet the age requirement can still use it to receive some benefits while their benefits grow by 8% annually until they reach age 70.
The restricted application strategy can add tens of thousands of dollars to a couple’s lifetime benefits when properly executed. It allows you to collect spousal benefits (up to 50% of your spouse’s full retirement amount) while your benefits increase.
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5. Boost your earnings record with strategic late-career moves
Social Security bases benefits on your 35 highest-earning years. Working longer at a higher salary can replace lower-earning years, increasing your monthly benefit.
This strategy can be compelling for those with zero or low earnings years. Each year of zero earnings you replace with even modest income can increase your monthly benefit by $50-100 or more, adding to significant sums over a 20-30-year retirement.
Strategic career moves in your late 50s or early 60s that increase your income can have an outsized impact on your Social Security benefits compared to raises earlier in your career.
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6. Seek specialized advice beyond what the SSA provides
Many retirees assume Social Security Administration staff can provide expert guidance on maximizing benefits, but that’s not their role. SSA representatives explain the rules but won’t offer personalized strategies, which could mean leaving thousands of dollars on the table over time.
Seeking outside advice can help you make smarter financial decisions and ensure you get the most out of your benefits.
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Making the most of your hard-earned benefits
These Social Security strategies can significantly impact your retirement income when effectively implemented. While the Social Security Administration provides basic information, it typically doesn’t advise on strategic claiming approaches that could maximize your benefits.
Understanding these options and how they apply to your unique situation can add tens or even hundreds of thousands of dollars to your retirement income over your lifetime. Social Security represents a substantial portion of most Americans’ retirement income, making optimization critical.
Consider consulting with a financial advisor specializing in retirement planning to determine which strategies work best for your specific circumstances. The relatively small investment in professional advice could pay dividends many times over through a more secure retirement.
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