Do You Know All 4 of These Social Security Secrets?

(Dan Caplinger)

If you want to get bigger Social Security checks when you retire, it’s important to know everything you can about the federal-government program. Unfortunately, it can be tough to get the information you need, and many people are still in the dark when it comes to key aspects of Social Security that determine the size of your benefits. Below, you’ll learn more about four essential parts of Social Security that aren’t as well-known as you might think.

1. Earning more raises your benefits — but the amount of the boost depends on how much you earn

Your top 35 years’ worth of earnings history goes into determining your monthly benefit, so boosting your average earnings will increase the size of your Social Security checks. However, people with less income over their careers get a bigger boost from every extra dollar of earnings than higher-income individuals.

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Specifically, the formula that determines benefit amounts adds $0.90 to your standard retirement benefit for every $1 in average monthly career earnings up to a certain amount, which is $1,115 for those turning 62 in 2023.

Once your average monthly earnings go above that mark, each additional $1 results in just $0.32 of extra benefits, up to $6,721. Beyond that, you’ll only get $0.15 in extra benefits for a $1 boost to average monthly earnings.

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2. Retiring later can give your benefits a double boost

Choosing to put off retirement for an extra year can help increase your Social Security benefits in two ways. Many people have their peak earning years late in their careers, so an extra year of work will often be a top-35 year that increases average monthly earnings. Moreover, if you can delay claiming Social Security an additional year because you work longer, your checks will typically be 6% to 8% higher than they would be if you claimed earlier.

3. There is no double benefit for spouses

Many people know that married couples have access to two different types of benefits. Those who have their own work histories can claim retirement benefits based on their own earnings, but they can also claim spousal benefits based on the work history of their spouse.

However, you don’t get to take those two benefits and simply add them up. Instead, the Social Security Administration applies your retirement benefit first. If your spousal benefit would be larger, then the SSA boosts your payout to the higher spousal benefit amount. If the retirement benefit would be larger, then you essentially don’t get any extra advantage from having the right to a spousal benefit.

4. Age 62 isn’t the earliest date for Social Security benefits if you’re a surviving spouse

Most regular worker retirement and spousal benefits are available for the first time at age 62. However, if you’re married and your spouse passes away, then you could be entitled to survivor benefits, which are available earlier.

Specifically, most surviving spouses can claim their survivor benefits beginning at age 60. Those who are disabled can claim as early as age 50. As with other types of benefits, those who claim early will have to accept reductions in their payment amounts, but the additional money can still be valuable.

One thing to note, as well, is that remarriage can end survivor benefits. However, if you wait until age 60 or later before remarrying, you’ll still be able to claim survivor benefits on your deceased former spouse’s work history.

Get the benefits you deserve

Social Security can be complicated to understand. Fortunately, though, some basic concepts are pretty easy to pick up, as long as you know about them. Be sure to get every penny of Social Security that you’re entitled to receive.

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