How to Maximize Social Security Benefits
Calculate how much you would gain by waiting., Weigh the benefits and costs of waiting., Work as you wait.
Step-by-Step Guide
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Step 1: Calculate how much you would gain by waiting.
Although you have a right to start drawing benefits at age 62, you will receive more if you wait until your “full retirement age.” Your “full retirement age” depends on the year you were born.
For those born in 1961, the full retirement age will be
67.
To find your “full retirement age,” use the Social Security Administration’s retirement calculator.
You also get credit for waiting until 70 to receive benefits.
You can get an increase of around 8% per year over and above what you would get if you started drawing benefits at your full retirement age.To calculate your benefits, pull out the Social Security Statement sent to you each year.
On the inside, you will be given 3 calculations: your expected benefit amount at age 62, the amount at your “full retirement age,” and your benefit amount if you wait until
70. -
Step 2: Weigh the benefits and costs of waiting.
About half of recipients take benefits at age
62.But whether or not you should wait until your full retirement age (or age 70) will depend on a variety of factors:
Your health.
If you choose to wait until 67 or 70 but are in poor health, you may die before you ever receive any benefits.
Your “break even” point.
If you knew when you were going to die, you could calculate how much you would receive in total benefits under each scenario: drawing at 62, your full retirement age, or at age
70.
The point at which two amounts equal each other is your “break even” point.
If you think you will live past the “break even” point, then you might want to wait.
To get help calculating your “break even” point, contact Social Security at 800-772-1213.
Whether your spouse worked.
If your spouse didn’t contribute much to Social Security, then you may want to wait longer to claim benefits.
By waiting, your spouse could receive a higher amount as a survivor should you die first.Whether you have children.
If you have dependents, then waiting will increase the amount they could receive should you die while they are children. , If you choose to forego Social Security benefits at 62, then you can continue to work until you choose to take benefits at your full retirement age or later.
Social Security benefits are calculated by taking the 35 years which were your highest earning and then applying a formula to this base amount.If you continue to work full-time, you can increase this base amount. -
Step 3: Work as you wait.
Detailed Guide
Although you have a right to start drawing benefits at age 62, you will receive more if you wait until your “full retirement age.” Your “full retirement age” depends on the year you were born.
For those born in 1961, the full retirement age will be
67.
To find your “full retirement age,” use the Social Security Administration’s retirement calculator.
You also get credit for waiting until 70 to receive benefits.
You can get an increase of around 8% per year over and above what you would get if you started drawing benefits at your full retirement age.To calculate your benefits, pull out the Social Security Statement sent to you each year.
On the inside, you will be given 3 calculations: your expected benefit amount at age 62, the amount at your “full retirement age,” and your benefit amount if you wait until
70.
About half of recipients take benefits at age
62.But whether or not you should wait until your full retirement age (or age 70) will depend on a variety of factors:
Your health.
If you choose to wait until 67 or 70 but are in poor health, you may die before you ever receive any benefits.
Your “break even” point.
If you knew when you were going to die, you could calculate how much you would receive in total benefits under each scenario: drawing at 62, your full retirement age, or at age
70.
The point at which two amounts equal each other is your “break even” point.
If you think you will live past the “break even” point, then you might want to wait.
To get help calculating your “break even” point, contact Social Security at 800-772-1213.
Whether your spouse worked.
If your spouse didn’t contribute much to Social Security, then you may want to wait longer to claim benefits.
By waiting, your spouse could receive a higher amount as a survivor should you die first.Whether you have children.
If you have dependents, then waiting will increase the amount they could receive should you die while they are children. , If you choose to forego Social Security benefits at 62, then you can continue to work until you choose to take benefits at your full retirement age or later.
Social Security benefits are calculated by taking the 35 years which were your highest earning and then applying a formula to this base amount.If you continue to work full-time, you can increase this base amount.
About the Author
Jennifer Jimenez
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