5 Crucial Steps to Max Your Social Security Payouts

Social Security is a valuable resource for many Americans, providing financial support in retirement or in the event of disability.

However, many people don’t fully understand how to maximize their Social Security payment.

In this article, we’ll cover five steps you can take to ensure you’re getting the most out of your Social Security benefits.

First, understand your benefits

The first step to maximizing your Social Security payment is to understand what benefits you’re entitled to.

Your benefits are based on your work history, with higher earners receiving higher benefits. You can view your estimated benefits by creating an account on the Social Security website, or by reviewing your annual Social Security statement.

Delay your claim

One of the most effective ways to maximize your Social Security payment is to delay your claim.

While you can start receiving benefits as early as age 62, your payment will be reduced if you claim early. By delaying your claim until your full retirement age (between 66 and 67, depending on your birth year), you can receive your full benefit amount.

If you wait even longer, until age 70, you can receive even higher benefits.

Coordinate with your spouse

If you’re married, you may be able to coordinate your Social Security benefits with your spouse to maximize your payment.

This is especially true if one spouse earned significantly more than the other. For example, the lower-earning spouse may be able to claim spousal benefits, which can be up to 50% of the higher-earning spouse’s benefit amount.

If he or she worked they would receive the higher of two amounts, either their regular Social Security benefit or half of your benefit.

Maximize your earnings

Your Social Security benefits are based on your earnings history, so maximizing your earnings can help increase your payment.

This can include working longer to increase your income, or taking steps to increase your income during your working years, such as pursuing education or training to advance your career.

If you have one or more years of very low or zero income, consider working beyond the 35 years required to get your maximum payment. Adding additional years past the 35th year eliminates the zero years in your final benefit calculation.

Minimize taxes

Finally, it’s important to minimize taxes on your Social Security benefits.

Depending on your income, up to 85% of your benefits may be subject to taxes. Some states also tax Social Security income.

One way to minimize taxes is to manage your income in retirement.

For example, if you have retirement savings, you may be able to withdraw from those accounts in a tax-efficient manner to reduce your overall tax burden.