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4 Tricks For Stretching Your Social Security Benefits

Tue Apr 28, 2015 15:00:18PM | Categories: Social Security
Two seniors aboard a cruise shipBy: U.S. Navy
Making the best of your Social Security benefits is a struggle for many Americans, especially those of you who are largely dependent on Social Security for most of your monthly income. Questions like when to begin drawing your benefits, how to best spend them, and what to do if your benefits aren't enough to survive on weigh on millions of seniors minds every year. But it doesn't have to be so stressful.

There are many ways to stretch your benefits to ensure you get the maximum amount of money you are eligible for and to help you survive on those benefits after you begin taking them in. The tricks listed below are just a handful of the many ways that you can stretch your Social Security benefits out as best you can.

1) Procrastinate, procrastinate, procrastinate

Sure, you can technically begin drawing your Social Security benefits when you turn 62, but that doesn't mean that you should. The longer you wait to begin drawing your Social Security benefits the more money you will get each month when you do start drawing. For example--if you begin drawing your benefits when you turn 62 you will only get roughly 75%, or $741 out of every $1,000 of the money you would get if you waited until you turned 70. That adds up to a lot of money in the long run.

If you don't like the idea of waiting until you turn 70 to begin drawing your benefits then consider waiting just one more year than you originally planned to. The early drawing penalty decreases every year from age 62 to whenever you full retirement age is. So the longer you wait, the more you will get when you do start drawing your benefits.

2) Work for 35 years

I know what you're thinking. You've put in thirty years of work and you just don't think you can handle another five years without driving yourself crazy. As hard as it might be, try to get through those next five years before retiring. The reason for this is because your benefits are calculated off of your 35 highest earning years. If you retire after only 30 years of working then zeros are added for five years, which could drastically cut down your benefits.

If you don't want to stay at your current labor intensive job until you hit the 35 year mark then consider looking for a less labor intensive job. No one said you have to stay at the same job until you retire, so maybe consider finding a job that will be more enjoyable in your later years. Regardless of whether you stay at your current job or seek out a less strenuous one, working for 35 years is the best way to maximize your overall benefits.

3) Fall in love; Get married

Married couple have a leg up when it comes to getting the most out of Social Security. Some of us might not find that very fair, but that's just the way things are and I wouldn't expect them to change anytime soon.

Married couple have the choice of drawing their own Social Security benefits or drawing 50% of their spouse's benefit. So if your spouse earned a lot more than you then you will have the option of drawing benefits based off of their income and not yours.

4) Don't earn too much money after you begin drawing your benefits

If you plan on striking it rich in retirement then you should wait to begin drawing your benefits until you do. That's because if you are under your full retirement age and continue to work then the Social Security Administration will deduct $1 from your benefits for each $2 you earn above $15,720. So if you plan on making more than $15,720 each year before you reach full retirement age then be ready for a big penalty on the amount you make above that.

This may not seem fair, but it is just another way that the Social Security Administration encourages you to hold off on drawing your benefits if you are going to continue to work. The penalty decreases after you reach the full retirement age, but there is still a penalty for making too much money after you begin drawing your Social Security benefits. You can read more information about how working while drawing Social Security affects your benefits.

These are just a few tips to help you maximize your Social Security benefits. Waiting, working, falling in love, and not earning too much after you begin drawing your benefits will help you maximize your benefits well into your retirement.
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