You’ve Earned It—Now Maximize It: What Smart Retirees Know About Social Security
Social Security is one of the most important income streams for retirees, but many Americans aren’t taking full advantage of what they’ve earned. With the average retiree collecting just 39% of their past earnings from Social Security, knowing how to boost your benefit can make a meaningful difference in your financial future.
Let’s look at a few practical ways you can increase your monthly check (and your long-term financial confidence).
1. Work at least 35 years
Your Social Security benefit is calculated using your highest 35 years of earnings. If you’ve worked fewer than that, zeros will be averaged in, which brings your monthly benefit down.
Even if you’ve already reached 35 years, working longer can still help. Later in your career, you may earn more, which could replace lower-earning years in the calculation. This is especially helpful for women, who tend to take time out of the workforce for caregiving responsibilities and are more likely to rely on Social Security for a larger portion of their retirement income.
2. Consider delaying your benefit
You can start claiming Social Security as early as age 62, but the tradeoff is a permanent reduction in benefits. If you wait until full retirement age (67 for most people), you’ll receive 100% of your benefit. And if you delay even longer, up to age 70, you’ll earn delayed retirement credits (8% more for every year you wait).
That could mean a monthly benefit that’s 24% higher than if you claimed at full retirement age, or as much as 77% higher than if you started at 62. For healthy individuals and those with longevity in their family, delaying benefits can significantly increase total lifetime income.
3. Make the most of spousal or survivor benefits
Married, divorced, or widowed? You may be eligible for benefits based on your spouse’s—or ex-spouse’s—earnings record.
Spousal benefits can equal up to 50% of your spouse’s full retirement amount, as long as they’ve already filed for benefits.
Divorced spouses may qualify if the marriage lasted at least 10 years and they haven’t remarried.
Widows and widowers may begin receiving reduced survivor benefits as early as age 60—or even earlier if caring for a child or living with a disability.
These benefits can offer a significant boost, especially for those who earned less during their working years.
4. Don’t forget about healthcare costs
Medical expenses can take a big bite out of your retirement income. The average retiree with traditional Medicare spends over $7,000 a year on premiums and out-of-pocket costs—that’s more than a third of their Social Security income!
To stretch your benefits further:
Explore Medicare Advantage or Medigap plans during open enrollment.
See if you qualify for Medicaid, which can help cover additional healthcare costs.
Talk with your doctor about lower-cost treatment alternatives, including generic medications and services covered by Medicare.
Being proactive about healthcare planning can help ensure your Social Security benefits go further.
5. Coordinate with your overall retirement income strategy
Social Security doesn’t exist in a vacuum. It’s just one piece of your larger retirement picture. Consider how it fits alongside other income sources, such as IRAs, 401(k)s, pensions, or annuities.
