When it comes to Social Security payments, many beneficiaries are not maximizing their payments to the fullest extent. There are many ways you can increase your payments to make sure that they can stretch as long as possible to cover your monthly expenses before the next round of payments. Beneficiaries must know their rights when it comes to their payments, and by taking advantage of these little-known secrets, you can boost your monthly income significantly.
Understanding the timing of taking your benefits
For most recipients, many want to claim their benefits as early as possible upon reaching the age of 62. This is because many beneficiaries want to retire as soon as possible. However, while it may be tempting to claim your benefits as soon as you can and give up working, timing when you claim your benefits can be more complex, and if you take time to plan out when you claim, you can severely increase the amount you receive.
One big thing to remember is that your Social Security benefits max out once you hit the full retirement age (FRA). This means, once you reach the FRA, your benefits will no longer increase. At this point, there is no benefit to you to keep waiting to claim. However, there are other strategies you can utilize aside from waiting until you hit the FRA, which is currently 68 years old, to increase your benefits.
The number one way to increase your benefits
The number one thing beneficiaries should pay attention to when it comes to timing the claiming of their benefits is understanding how spousal benefits work. If you are married and are the lower-earning spouse, it is recommended that this spouse start collecting their benefits at an earlier age before claiming the spousal benefits at age 70. This is because upon reaching the full retirement age, you and your spouse cannot both claim spousal benefits. Therefore, it makes sense that the lower-earning spouse claims their benefits early, and once the higher-earning spouse reaches the FRA, they claim their benefits while you then claim your spousal benefits from their income.
However, if you are doing this strategy, it is important to bear in mind that if you do claim early, your spousal benefits will be reduced to a permanently reduced rate if your spouse decides to collect their benefits before or in the month you applied for your retirement benefits. This is why you must make sure to maximize the income from this strategy, so that if your spouse is not collecting their retirement benefits yet, you can claim the spousal benefits at a later date, thereby maximizing your benefits.
Three more secrets to boost your Social Security benefits
Timing your benefits is incredibly important when it comes to maximizing your benefits, however, there are three other ways you can boost your retirement benefits:
- Work for at least 35 years.
- Understand how spousal benefits apply to divorced couples.
- You can reverse your benefits claim.
Your benefits are calculated based on your highest 35 income-earning years. If you do not earn an income for that long, those years are calculated at “0”, reducing your overall benefits. Make sure that you rack up at least 35 income-earning years to maximize your benefits. Spousal benefits are valid for couples who are married for at least 10 years, which includes divorced couples who were married for that long. Critically, if you claim your benefits but decide within one year of claiming that you no longer wish to receive your benefits, you can reverse the decision by paying back all the benefits paid to you, thereby letting your benefits continue to grow.
