Cutting Through the Misinformation: When to Start and How to Maximize Your Social Security Benefits

Posted in: Personal Financial Management

There is a lot of misinformation out there regarding the best strategies for starting to take your social security benefits. Not only is it important to accurately identify the best time to start your social security benefits, it is also essential to know how to maximize those benefits. I work with clients everyday who do not realize the advantage of waiting until their full retirement age to begin claiming benefits verses automatically receiving them just because they are eligible.

Here are a few Social Security facts that surprise many people:

  • If you choose to claim early, for example at age 62, you will receive 25% less than if you wait until your full or “Normal Retirement Age” (the age at which a person may first become entitled to full or unreduced retirement benefits).
  • Social Security benefits increase by 8% a year for every year that you delay collecting between ages 66 and 70. That is 32% more than what you would have had at the full or normal retirement age of 66.
  • On the other hand, there is no reason to delay beyond age 70 since that is the age when you reach your maximum Social Security benefits.

Below is a chart from the Social Security Administration’s website that outlines your full or normal retirement age based on your year of birth.

Year of Birth Full Retirement Age Months Between Age 62 and Full Retirement Age
1937 or earlier 65 36
1938 65 and 2 months 38
1939 65 and 4 months 40
1940 65 and 6 months 42
1941 65 and 8 months 44
1942 65 and 10 months 46
1943-1954 66 48
1955 66 and 2 months 50
1956 66 and 4 months 52
1957 66 and 6 months 54
1958 66 and 8 months 56
1959 66 and 10 months 58
1960 and later 67 60

Are you still working? If you continue to work after you start taking social security benefits, your benefits may be reduced if your income exceeds a certain dollar amount, which is currently $15,120. This is another reason to defer your benefits until you reach your full retirement age. Once you reach full retirement age, there is no reduction in benefits if you continue to work. In fact, working beyond your full retirement age can increase your benefits.

Questions to Ask Yourself When Determining When to Start Your Social Security Benefits

  • Are you in good health? If you are concerned about the longevity of your life and paying for medical care, then it might be a good reason to begin your social security benefits earlier.
  • How is your family affected? Your spouse may be eligible for a survivor benefit based on your work record. If you start benefits early and you pass away before your spouse, full benefits cannot be paid to your spouse based on your record.

Maximizing Your Social Security Benefits

For married people, benefits are based on either:

  1. your own work record OR
  2. up to 50% of the higher earner’s benefit

Once you reach your full retirement age, you may be able to claim spousal benefits and then later switch to payments based on your own work record, which in many cases could be higher due to delayed claiming.

Strategies for Maximizing Social Security Benefits Example: Husband and Wife – both were born in 1943 and have reached their normal retirement age of 66

  • The husband claims retirement benefits and then immediately suspends them, allowing his own retirement benefit to grow.
  • The wife can then file for a spousal benefit only and allow for her own retirement benefit to grow also.
  • When they both reach age 70, they can file for their own retirement benefits, which have been maximized (earning a credit of 8% per year between their normal retirement age of 66 and age 70 in this example).

Strategies for Maximizing Social Security Benefits Example: Ex-spousal Benefits

  • A spouse who has not re-married can claim on his/her ex-spouse’s work record if the marriage lasted at least ten years.
  • If the spouse waits until age 60 or later to remarry, then he/she can collect on his/her ex-spouse’s benefit if that creates a bigger benefit than the current spouse’s benefits.
  • A spouse cannot collect both; however, there are cases when there are multiple ex’s where several people are collecting on one person’s earnings record because of this rule.

While we don’t know the exact future of Social Security, for those approaching retirement age, it is an important part of your retirement plan. If you have any questions about your Social Security benefits, the AARP website offers a useful benefits calculator that helps estimate your Social Security benefits and shows you when will be the best time to claim.

It is important to note that the Social Security Administration will no longer be mailing statements each year. Instead, you will need to go to to set up an account to view your benefits and earnings history. Make sure to log-in and check yearly to ensure your earnings have been recorded properly.

Your social security benefits are only a piece of a full retirement plan, so if you are approaching retirement age and have any questions or concerns, please feel free to contact me at