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How to maximize Social Security benefits in retirement age

SS benefits provide workers with a monthly income once they reach retirement. Here is a guide to helping you increase your future benefits.

More than 180 million Americans receive Social Security benefits, but how is the value determined? How do annual earnings contribute to the calculation?

Many people rely on Social Security payments to subsist in their elderly stage; however, we must remember Social Security is not a retirement plan, but support for retirees. The amount each person will receive at their full retirement age - generally set at 67 - will depend on several factors, including the date you started claiming benefits, the total of worked years, and your work history, among others.

Here is a guide to help you increase your benefits once you retire.

1. Work for at least 35 years

The amount of money Social Security gives people when they retire has lots to do with the time they have worked for. Therefore, make sure you work for at least 35 years because if you retire earlier, zeros will be added to the calculation, reducing your income considerably.

2. The higher you earned, the higher the payment

If you cannot ask for a wage raise in your current job, this way of increasing your payment is still possible. A way to earn more could be getting a side job, which could increase your earnings in the future.

3. Work until your full retirement age

This is more important than people might think. The age of early retirement in the US is currently set at 62 years, and despite having the possibility of claiming SS benefits before your full retirement age, if you do so you will see your monthly benefits decreased.

For each month there is between when you start claiming SS and your full retirement, 0.5% will be deducted from the money you would have earned if you had waited until 67. This means you could decrease your retirement benefits up to 30% just by starting early.

However, if you already did claim benefits early there are still two ways to boost your payments:

Use a do-over

This would undo any claim you did within the last 12 months, but in exchange, you would have to give back the exact quantity of money you have previously received since you started to claim SS benefits.

Suspend benefits

If it took you more than a year to regret claiming benefits early, you could still stop your monthly benefits.

However, the requirement is only people who are past the full retirement age can qualify for this option. One thing to bear in mind is that if you select this option, spouse benefits will also be stopped (divorced spouse benefits claimants will still be able to get their money).

Payments will automatically be released at the age of 70. Meanwhile, you can still see your benefits increased by 8% every year between 62 and 70.

4. Avoid claiming SS for as long as you can

As I just mentioned above, for every whole year you delay, your SS benefits will increase by 8% up to the maximum age of 70, where you must start receiving the payments.

Imagine you start claiming benefits at the age of 67 (full retirement age) and you receive a total of $1,500. If you had delayed the payments by three years, your benefit would have increased by 24%, meaning you would earn $1,860 per month at the age of 70 and onwards. 

5. Don't earn too much during retirement

Recipients who are under 67 must pay special attention to their annual earnings, given that those who earn more than $17,640 will get $1 deducted for every $2 earned over the limit. Nevertheless, once at your full retirement age, these earning limits increase to $46,920, with $1 of every $3 above the limit being withheld.  

6. Claim spouse benefits

If you are over the age of 62, make sure you collect your spouse's benefits. This could be up to 50% of the worker's benefit at their full retirement age.

If you are currently divorced or unmarried to a previous marriage that lasted at least 10 years, you might be able to claim benefits based on your ex-spouse's work record. However, this only applies to those that remain single. If you remarry with another person, the benefits of your previous marriage stop. 

7. Claim survival benefits

If a married individual passes away, their surviving spouse can inherit their SS benefits, if it's more than their own working benefits. However, they could increase their spouse's benefits by delaying the payment. 


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