Top Overlooked Savings Tips for Maximizing Social Security Benefits

On February 16, 2025 By newsroom Topic: Saving And Investing Money

Social Security plays a vital role in retirement planning. Here's a quick guide to strategies many Americans might be missing out on:

1. Delay Claiming Benefits

Why it Matters: Benefits grow every year you delay past age 62. Waiting until your full retirement age (67 for most) or even 70 can significantly increase monthly payments.
Pro Tip: If you can afford to delay, the increase is worth it.

2. Maximize Your Earnings Record

Why it Matters: Social Security benefits are based on your 35 highest-earning years.
Pro Tip: If you're earning more now than in earlier years, consider working longer to replace lower-earning years with higher-income ones.

3. Check Your Earnings Record Regularly

Why it Matters: Mistakes in your earnings record can lower your benefits.
Pro Tip: Review your Social Security statement annually and report discrepancies immediately.

4. Understand Spousal Benefits

Why it Matters: Spouses can claim up to 50% of their partner's benefit, even if they’ve never worked.
Pro Tip: Plan strategically for both spouses to maximize household income in retirement.

5. Consider Survivor Benefits

Why it Matters: Widows or widowers can claim survivor benefits, which may be higher than their own.
Pro Tip: Understand the timing and rules for survivor benefits to avoid leaving money on the table.

6. Minimize Social Security Taxes

Why it Matters: Up to 85% of your benefits can be taxable depending on your income.
Pro Tip: Draw from Roth IRAs or other non-taxable sources to keep income lower in retirement.

7. Work at Least 35 Years

Why it Matters: Fewer than 35 years of earnings mean zeros are factored into your benefit calculation.
Pro Tip: Aim for a full 35 years of work to ensure your benefits aren't reduced.

8. Factor in Government Pensions

Why it Matters: Certain pensions can reduce Social Security benefits under the Windfall Elimination Provision (WEP) or Government Pension Offset (GPO).
Pro Tip: If you're affected, adjust your retirement plans to account for reduced benefits.

9. Understand the Earnings Test

Why it Matters: If you work while claiming benefits before full retirement age, your payments may be temporarily reduced.
Pro Tip: Know the income limits and plan work around these rules.

10. Regularly Update Your Retirement Strategy

Why it Matters: Financial situations and retirement needs can change.
Pro Tip: Reevaluate your Social Security strategy periodically with a financial advisor to stay on track.

Summing it up

Being proactive and informed about Social Security can significantly boost your financial security in retirement. Consult a financial advisor to tailor these tips to your unique situation.