Social Security checks will increase – here’s how you can increase your benefits even more

With projections indicating that Social Security could face insolvency within the next decade, many workers are understandably concerned about the program’s long-term sustainability. Though the likelihood of the program completely disappearing is low, future beneficiaries may see reduced benefits if reforms are not enacted. For individuals who may not have extensive retirement savings, the possibility of smaller Social Security checks heightens anxieties around financial security in retirement. However, while it’s impossible to control the fate of Social Security on a policy level, there are steps individuals can take to maximize their benefits under the current system. Here’s a look at strategies to make the most of Social Security as part of your retirement planning.

Work for at Least 35 Years

The Social Security Administration (SSA) calculates your monthly benefit based on the 35 years of highest earnings, adjusted for inflation. This calculation uses your average indexed monthly earnings (AIME) over those years to determine the benefit you’re entitled to at your full retirement age. If you have fewer than 35 years of work, the SSA will factor in zero-income years to fill in the gaps, which will lower your AIME and, subsequently, your monthly Social Security check.

While you can qualify for Social Security benefits with as few as ten years of work, aiming for at least 35 years is key to maximizing your potential benefit. For workers who may have taken time off for caregiving or other reasons, it might be beneficial to re-enter the workforce to fill any gaps and avoid the penalty of zero-income years in the SSA’s calculation.

Choose the Right Time to Claim Social Security

The age at which you start receiving Social Security benefits has a substantial impact on your monthly check size. Each worker has a full retirement age (FRA) based on their birth year, which generally falls between 66 and 67 for those retiring today. If you start claiming Social Security at your FRA, you receive 100% of your calculated benefit. However, claiming before FRA results in reduced benefits: for example, applying at age 62 can reduce your monthly benefit by as much as 30%.

Conversely, delaying your claim past FRA results in an increase of about 8% for each year you wait, up to age 70. This means that by delaying from FRA to 70, you can receive up to 132% of your standard benefit. However, delaying isn’t ideal for everyone. If you have health issues or a shorter life expectancy, it may make more financial sense to claim earlier. Additionally, waiting until age 70 could be challenging for those with immediate financial needs who rely on Social Security income to cover basic expenses.

Coordinate with Your Spouse for Optimal Benefits

For married couples, Social Security claiming strategies are more complex and potentially beneficial when planned thoughtfully. Both spouses may be eligible for benefits based on their individual earnings histories, as well as spousal benefits. Spousal benefits can provide up to 50% of the higher-earning partner’s benefit at FRA, but the lower-earning spouse can only claim this benefit if their partner has already filed for their own.

When both partners have similar earnings, each spouse often claims their own benefit, and delaying may maximize total lifetime benefits. However, for couples where one spouse has earned significantly more, it may be advantageous for the lower earner to claim earlier, providing immediate income and allowing the higher earner to delay. Once the higher-earning spouse files, the lower earner may switch to a spousal benefit if it provides a higher monthly payment.

If a higher-earning spouse passes away, the surviving spouse may receive the deceased partner’s benefit if it exceeds their own, making a delayed filing advantageous for legacy planning.

Additional Tips for Maximizing Social Security Benefits

1. Stay Informed on Social Security Updates: Given Social Security’s evolving financial landscape, staying informed on any legislative changes is crucial.
2. Minimize Income During Retirement: Earnings above the income limit (if you file before FRA) may result in temporary benefit reductions due to the earnings test, reducing monthly payments.
3. Consult a Financial Planner: For those facing complex financial or health situations, professional advice can help optimize Social Security timing and ensure retirement goals are met effectively.

Factor	Impact on Social Security Benefit
Work History	Aim for at least 35 years of earnings to avoid zero-income years lowering your average indexed monthly earnings (AIME).
Claiming Age	Claiming before FRA reduces benefits; delaying after FRA increases benefits up to age 70.
Spousal Coordination	Coordinating benefits may maximize total household income, especially if one spouse has a significantly higher earnings record.
Income During Retirement	High earnings before FRA may trigger temporary benefit reductions, so consider minimizing taxable income if claiming early.

Even though Social Security faces financial challenges, maximizing your benefits is possible with strategic planning. By ensuring a solid work history, choosing the right time to claim, and coordinating benefits if married, you can secure a larger and more reliable stream of retirement income.