5 Ways to Maximize Your Social Security Benefit

Glenn Kirst is a planning excellence lead consultant at Northwestern Mutual. 

When you deposit money in the bank, you expect to receive every single dollar when you withdraw it. It’s your money.

Every paycheck, you put money into Social Security. Yet not everyone gets as much as they could from this benefit when they retire. That’s because the timing of when you claim your benefit and how you do it can have a big impact on how much you get—often for the rest of your life.

Here are five things you should know so you can maximize your Social Security benefit.

How to maximize your Social Security benefit

1. Don’t file for benefits before your full retirement age

Collecting Social Security before you’ve reached full retirement age (also known as FRA) can permanently reduce your lifetime benefit.

For anyone born in 1960 or later, the full age of retirement is 67 (if you were born before 1960, your retirement age will vary). If a person born after 1960 plans to retire at 62 (the earliest you can begin collecting), their monthly Social Security benefit will be reduced by roughly 30 percent for the rest of their life because they’ll receive benefits for longer.

So, if you can, avoid collecting early.

You can also increase your benefit by waiting even longer to claim Social Security. That’s because you’ll receive an 8 percent boost in your benefit every year you postpone collecting beyond your FRA (up to age 70). Waiting until age 70 will yield a 24 percent larger monthly benefit for the rest of your life. As a bonus, this also means your annual cost-of-living increase (typically around 2 percent) will apply to a larger sum every year thereafter.

2. Utilize spousal benefits

Married couples have a few advantages when it comes to claiming Social Security benefits. That's because you and your spouse can both claim each of your benefits and at different times. So your best bet is to delay taking the higher benefit of the two for as long as possible.

If you’ve been married at least a year, you will either get your benefit based on your work record or 50 percent of your spouse’s full retirement age benefit, whichever is higher. With this in mind, couples should think strategically about who begins collecting and when.

In an ideal situation, the spouse who earned less over his or her career would file to receive his or her benefit at full retirement age. That starts to bring in some money. Then, the higher-earning spouse lets his or her benefit grow and files when he or she reaches 70. If that spouse dies before the other, the surviving spouse will then get the larger benefit for the rest of his or her life.

You can also claim benefits based on your ex-spouse’s work history. So long as you were married 10 years or longer and your ex-spouse is eligible to begin collecting, you are entitled to one-half of your ex’s benefit. (You must also not be currently married in order to receive a divorced spousal benefit.)

3. Another year of work could go a long way

Your Social Security benefit is based on an average of your highest-earning 35 years, which means you’ll want your 35 strongest years on the record if you want a larger benefit.

That’s because higher lifetime earnings result in higher benefits. If there were some years when you didn’t work, or had low earnings, your benefit amount may be lower than if you worked steadily.

For the sake of simplicity, let’s say your career was 32 years long because you took some time off or you were just ready to kick back and retire early. Technically, that means three zeroes (32 out of 35 years) would be factored into the calculation for your benefit, reducing it as a result. There’s no requirement to work 35 years but this is how the system works. 

If you’re feeling comfortable with your retirement savings, three more years on the job may not be worth a slightly larger Social Security benefit, especially if you have a wish list of places to see or grandchildren to visit. If you still want to string together a few more income-earning years, maybe pick up a part-time job that indulges a hobby or helps other people—something that’s fulfilling. 

4. Minimize income if you’re collecting benefits

You can still work while taking your Social Security benefit, but it could reduce how much you collect from Social Security. If you begin collecting before your full retirement age and still work, the government will deduct $1 from your total benefit for every $2 earned above $22,320 in 2024—there’s no impact if your income falls below this threshold. For those who reach their FRA in 2024, $1 is deducted for every $3 earned over $59,520 until the month the worker reaches full retirement age. After that point, there is no earnings limit.

5. Every little bit helps

Social Security was never designed to serve as a person’s primary source of income in retirement—it’s supplementary. Still, that monthly benefit is a source of stable, guaranteed income that’s a crucial part of many people’s retirement plans.

Ultimately, you paid into Social Security throughout your entire career, so why not get every penny you’re entitled to? If you have questions, your Northwestern Mutual financial advisor can help you build a financial plan and show you the impact of different Social Security claiming decisions—as well as additional strategies that can help you maximize your benefit.