Many seniors depend on Social Security benefits as their main source of income. Unfortunately they may not be maximizing the benefits that are available to them. There are plenty of ways to increase your social security benefits. Make sure you and your spouse are getting the most out of social security.

Spousal Strategies

In the past there was something spouses could do that was called file and suspend. Recently congress has closed that loophole in social security so it is no longer a valid strategy to maximize your social security benefits.

One spousal strategy involves two working spouses. The spouse with the lower income should file for social security when they reach full benefits age. The spouse who has the higher income should delay benefits until age 70. This helps maximize the benefits for the couple as the larger income sees a bigger benefit from waiting.

Understand the Social Security Formula

Do you know how your social security benefits are calculated? It is much different than how most pension plans calculate their benefits.

Instead of looking at the last few high paying years, as a pension would, Social Security does a much deeper dive into your work history. They look at your 35 overall best earning years. This means that depending on how many years you have worked for, they may include income from high school part time jobs or years where you were under or unemployed.

Choosing to work a year or two longer could have those years knocked off of your record so that you do not have them counted towards your social security benefits. Make sure that you know what working years are going to be counted into your benefits calculation so that you don’t have years of little to no income on your record.

Don’t be in a Hurry

Another thing to understand properly is the penalty that is paid for claiming benefits early. Or more to the point, the advantage of waiting until your full retirement age to maximize your benefits. Your full retirement age is based on your birth year. You can easily find what your full retirement age is by visiting the Social Security Administration’s website.

Depending on how early you file you can see a serious reduction in your benefits. Filing up to 36 months before your full retirement age will reduce your benefits by nearly 7 percent. If you file earlier than 36 months you will be assessed an additional 5 percent for each year earlier.

On the other hand waiting to file will increase your benefits. For each year that you wait your benefits will increase 8 percent up until age 70. The math behind this is very easy to calculate.  While it may be attractive to retire early, if you do wait to claim your benefits or you are simply throwing money away.

Elder Law Attorneys can Help

Having trouble understanding the complexities of Social Security law? Why not get help from the experts at Stano Law Firm? We will be more than happy to help you.