3 Social Security Tips That Could Earn You Thousands

Social Security provides key benefits to millions of retirees, many of whom wouldn't manage to pay their bills without it. But what you may not realize is that the average recipient today gets just $1,360 in monthly benefits -- hardly enough to cover even a modest lifestyle. If you're looking to get more money out of Social Security, here are a few things you can do to make that happen.

1. Wait until you turn 70 to file for benefits

Your Social Security payments are mainly determined by how much you earned during your top working years. Once you reach your full retirement age, you'll be eligible to collect your monthly payments in full.

If you were born between 1943 and 1954, your full retirement age is 66. If you were born in 1960 or later, your full retirement age is 67. And if you born after 1954 but before 1960, your full retirement age is somewhere in between.


That said, you're not required to claim your benefits when you reach your full retirement age. If you hold off, you'll get an 8% boost for each year you delay up until age 70, at which point there's no further incentive to wait. This means that if your full retirement age is 66 but you file for benefits at 70, you'll get a 32% benefit increase that will remain in effect for as long as you collect those payments.

While waiting on Social Security can put thousands of dollars back in your pocket over time, keep in mind that this strategy only works if you expect to live a long life. The reason? Though you'll increase your monthly payments by delaying Social Security, you'll also get fewer payments. And if you pass away before surpassing your breakeven age, you'll end up losing out.

As an example, imagine your full retirement age is 66 and your full monthly benefit amount is $1,500. You could claim your benefits on time or hold off until 70 and raise them to $1,980. In this case, your breakeven age will be 82.5 -- because at that point, you'll have collected a lifetime total of $297,000 in either scenario. But if you only live until 80, you'll actually lose out on $14,400 in lifetime benefits by filing at 70. While delaying Social Security can work out in your favor, don't chance it if you're not in good health.

2. Work longer

Your Social Security benefits are based on the average income of your 35 highest-earning years. But some people don't even spend 35 years in the workforce. Many, for example, take time off to raise children or care for family members. The problem is that for every year you don't work, you get a big fat $0 factored into your weighted average. The benefit of working longer is that you'll get an opportunity to replace some of those $0 years with actual earnings, thus boosting your benefits on a whole.

Even if you didn't take time off at any point during your career, most people earn more money later in life than they do during their first few years on the job. If your salary is at an all-time high and you keep at it a few more years, you'll raise your lifetime average earnings -- and your benefits.

3. Work and collect benefits simultaneously

Working and collecting Social Security at the same time allows you to double up on income -- and thankfully, there's nothing to stop you from doing just that. Once you reach your full retirement age, you can earn as much money as you'd like without seeing a reduction in benefits.

That said, if you haven't reached your full retirement age, you may lose a portion of your benefits initially depending on how much you earn. This year, you'll lose $1 for every $2 in earnings above $16,920 -- unless you're reaching your full retirement age in 2017, in which case you can earn up to $44,880 without facing a reduction, and you'll only lose $1 for every $3 over the limit.

Although working and collecting Social Security prior to reaching full retirement age will reduce your benefits at first, you'll eventually get that money back (in theory): Once you hit full retirement age, your benefits will be recalculated to adjust for the amounts withheld.

The more you know about Social Security, the more money you're likely to get out of the program. Whether you're a few years or a few decades away from retirement, it pays to read up on how Social Security works so you can devise your own strategy for claiming benefits.

The $16,122 Social Security bonus most retirees completely overlook If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $16,122 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after.Simply click here to discover how to learn more about these strategies.

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