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Investors have a variety of investment vehicles to support funding their retirement, ranging from IRAs to 401(k)s to defined benefit plans. Yet, Social Security is often overlooked as a retirement resource with many people unaware of how large an amount it can be. While it may be tempting to draw upon Social Security retirement benefits prior to full retirement age (and over 53%1 of those eligible do), by selecting a permanently reduced benefit, you may be leaving money on the table. Depending on when and how you start your benefits, you could gain (or lose) up to 20% of the value. Although this may sound too good to be true, it’s possible to maximize your Social Security retirement benefits by using a few solid strategies.

Maximizing Your Social Security

Three Retirement Benefit Streams

Social Security retirement benefits are divided into three separate but related income streams (worker, spouse, and survivor). You likely are familiar with the worker’s retirement benefits, which are based on covered earnings over a career. Forty quarters of work are needed to qualify. In addition, a husband or wife (or ex-spouse) can collect a spousal benefit of up to 50% of a worker’s benefit. The Social Security Administration will allow the received benefit to be the higher of the spousal benefit or one’s own benefit, but not both. Finally, a widow(er) can receive the higher of his/her worker benefit or his/her spouse’s worker benefit as a survivor’s benefit. Married couples can receive more benefits over their lifetimes by integrating all three streams.

Check Your Social Security Records

Make sure the Social Security Administration has an accurate record of your lifetime earnings, as all benefits are based on them. To check your covered earnings and obtain an estimate of your future benefits, visit If the Social Security Administration’s records are incorrect, you may not receive all the benefits to which you’re entitled. To report an error, contact the Social Security Administration to begin the process of correcting your statement.

Good Things Come to Those Who Wait

This old adage applies to deciding when to start receiving your Social Security retirement benefits. For baby boomers born between 1943 and 1954, the full retirement age (when unreduced benefits are first available) is age 66. Benefits are reduced to 75% of your full-retirement age benefits amount if you start collecting at age 62. Yet, you can earn benefit increases equal to 8% a year for each year you delay your benefits from age 66 to age 70. So, your retirement benefit will be at least 76% higher by waiting to collect at age 70 versus beginning at age 62 (132% vs. 75% of full-retirement age benefit amount). Given the low interest rates offered by savings accounts, an 8% per year delayed credit is an attractive option. Concerns that Social Security will not be able to honor its current obligations fully are real, but most experts predict that needed changes to the program will largely impact younger workers versus those approaching retirement today.

Social Security as Longevity Insurance

A critical financial objective is to prevent outliving your assets and delaying receipt of Social Security payments can help. Married couples can coordinate their claiming strategies to use Social Security for longevity protection and to maximize the benefits they receive over their joint lifetime. Here’s an illustration. Jill, a managing partner of a large firm, is the higher-earning spouse. She files and begins to receive her monthly Social Security benefits equal to $2,000 at age 66, her full retirement age. Jack, her husband, is a part-time marketing administrator and is also age 66. He can receive the higher of his own benefit or his spousal benefit, but not both. Jack has the option to receive $750 per month based on his own benefit or a spousal benefit worth $1,000 per month (50% of Jill’s benefit). Jack will receive the spousal benefit because it is the higher of the two. If Jill decided to delay receiving her benefits until age 70, she would receive a monthly benefit amount 32% higher ($2,640) than at age 66. If Jill decided to receive her benefits as soon as she was eligible at age 62, her benefit would be reduced to 75% ($1,500) of her full-retirement age benefit.

Assuming that Jill lived until age 90, if she were to file and receive benefits beginning at 62, she would receive $72,000 in aggregate less than what she would have if she filed at 66. If Jill decided to delay receiving her benefits until age 70 and lived until 90, she would receive $57,600 more in benefits than if she began at age 66. Further, if Jill decided to receive her benefits at age 70 and dies earlier than expected at age 71, Jack would receive a survivor’s benefit equal to $2,640 per month. If Jill did not delay her Social Security benefits, Jack’s survivor’s benefits would have been $2,000 (Jill’s amount at age 66) versus $2,640 (Jill’s amount at age 70).

A couple’s respective ages, health, life expectancies, and cash flow needs are several factors to consider when determining the best strategy to pursue. Each client’s situation is unique. Before filing for Social Security benefits, review your options with an expert advisor to determine a personalized strategy.


1. Social Security Administration, “6.A OASDI Benefits Awarded: Summary,” Annual Statistical Supplement to the Social Security Bulletin, 2018,

Filed under: Financial Planning

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