3 Little-Known Strategies to Maximize Social Security Benefits

While collecting Social Security benefits may seem straightforward- there are actually several strategies for collecting benefits — especially if you are married — that can increase your retirement benefits.

There are three basic options for when to start taking Social Security benefits: You may begin taking benefits between age 62 and your full retirement age- you can wait until your full retirement age (which varies by your age)- or you can delay benefits and take them anytime up until you reach age 70. The longer you delay- the higher your benefit will be. If you are married- you have a fourth option: You can collect spousal benefits instead of collecting on your own record. If your spouse earned considerably more than you- this can be a very attractive choice.

While there are four basic options for collecting benefits- there are ways to combine these choices to provide even more options.  Here are three of the top strategies that you can use to maximize your Social Security benefits:

  • File and Suspend. This strategy works for couples in which one spouse is ready to retire- but the other spouse is planning to continue working. A working spouse who has reached full retirement age can file for benefits and then immediately suspend them. Once the worker suspends benefits- the non-working spouse can begin receiving spousal benefits while the worker continues to work. The longer the worker delays retirement- the more delayed retirement credits he or she will accumulate.
  • Claim Now- Claim More Later. Under this strategy- the spouse who earned less- would claim early retirement benefits at 62 while the higher-earning spouse waited. The higher-earning spouse would claim a spousal benefit once he or she reached full retirement age. Then at 70- the higher-earning spouse would claim the maximum amount of his or her retirement benefit and stop receiving the spousal benefit.
  • Do-Over Rule. Suppose you reach early retirement age and have a short-term need for money? An individual who is 62 years or older can start collecting benefits but stop the benefits within 12 months of the start- repay the benefits collected- and then still be eligible for the higher benefit amount at full retirement age or older. It is essentially a one-year interest free loan. If you take benefits early but are not able to stop the benefits within 12 months of starting- you can still suspend your benefits in order to earn higher benefits. For example- if you start collecting at 62 but no longer need the income once you reach your full retirement age- you could suspend benefits until 70. You won’t get a complete do-over- but between your full retirement age and 70- you would earn delayed retirement credits- which would increase your ultimate benefit amount when you collect at age 70.

For more information about Social Security and topics discussed within this article, visit Elder Law Answers.