How To Help Maximize Social Security Benefits


There are good reasons to delay starting Social Security benefits, but there are also good reasons to begin them early. It really does depend on your circumstances.

If you claim earlier than your full retirement age (FRA), your benefit will be permanently reduced. The age to qualify for the full Social Security benefit varies by birth date, not only for beneficiaries, but also for surviving spouses who rely on the primary earner’s benefit:

  • For people born between 1943 and 1954, FRA is age 66.
  • For people born between 1955 and 1959, FRA ranges from 66 and 2 months to 66 and 10 months.
  • For people born in 1960 and later, FRA starts at 67.
  • For surviving spouses born between 1945 and 1956, FRA is age 66.
  • For surviving spouses born from 1957 to 1961, FRA ranges from 66 and 2 months to 66 and 10 months.
  • For surviving spouses born in 1962 and later, FRA is 67.

Why would you claim earlier than FRA if your benefit will be reduced? One reason to start them early is if you want to retire early and need Social Security benefits to help cover your expenses. Or, if you want your investments to have a longer time to grow, you may want to begin benefits so you don’t have to draw from your retirement accounts — at least not until you have to take required minimum distributions (RMDs) at age 72. Taxable brokerage accounts can continue growing without distributions.

However, delaying benefits can have some advantages as well. The main one is that if you wait until FRA, you’ll receive a higher monthly payout by avoiding the permanent reduction in benefits before what would have been your full retirement age. And if you delay beyond FRA, your permanent benefit allows collection credits ranging from 5.5% to 8% (depending on your birth year) up to age 70. This may be a good option if you continue working through your 60s and/or have plenty of retirement assets you can start tapping for income when you retire. Also, bear in mind that the longer you wait, the higher the benefit will be for a surviving spouse who will rely on your benefit. The same applies if you have children who would be eligible for benefits.

Obviously, deciding when to start drawing benefits can be a big decision — one that should be determined based on your personal factors, such as your age, income, ability/desire to work, your spouse’s income, your health, your assets, possibly whether or not your mortgage is paid and even the lifestyle you want to enjoy during retirement. We can help you evaluate your entire financial picture to help you make this decision. Feel free to contact one of our experienced advisors.

There are a few more things you should know about spousal benefits. For example, a spouse can receive 50% of the higher-earning spouse’s Social Security benefit or the benefit based on her own work history — whichever is higher. A spouse can apply for benefits based on the primary earner’s work history only after the primary has already claimed benefits. Be aware that spousal benefits are available only after the couple has been married for at least one year. When a couple divorces, the ex-spouse can apply for benefits if the marriage lasted 10 or more years and once they have been divorced for at least two years.

Here are a few other tidbits:

  • In 2021, the average Social Security beneficiary will collect $1,543, according to the Social Security Administration.
  • In 2021, the maximum benefit anyone can receive is $3,895, which includes delayed retirement credits up to age 70.
  • For self-employed people who must pay both the individual and employer Social Security (FICA) tax, the maximum tax in 2021 is $17,707.20.

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