Maximize Your Social Security Payout After Claiming Benefits: Here Are 3 Smart Strategies

Social Security benefits are a lifeline for many seniors, as nearly half the households with people aged 65 or older rely on them as their primary source of income.

However, despite annual cost-of-living adjustments (COLAs), many retirees feel their Social Security checks don’t stretch as far as they once did.

Even though Social Security stops adjusting past earnings for inflation after age 60, fortunately, older workers still have opportunities to boost their benefits. There are several ways in which people can increase the amounts on their monthly check, even after they have started receiving Social Security benefits.

It’s important to fully explore all available benefits, as making informed decisions can improve the Social Security payout and provide greater financial security in retirement.

Here are three strategies to boost Social Security income.

1. Boost Social Security by working in your 60s

For some seniors, continuing to work after claiming Social Security can help boost their benefits. The Social Security Administration calculates the person’s monthly payment based on their highest 35 years of earnings, adjusted for inflation. If people stop working at age 60, their average earnings won’t increase, and Social Security benefits will be based on that lower figure.

However, if someone keeps working into their 60s and 70s, they may replace some of their lower-earning years with higher earnings, which can raise the average and, in turn, their monthly benefit. The Social Security Administration updates the benefit every year, so replacing a lower-earning year with a higher one will increase the payment.

If a person is under full retirement age and is still working, the retirement earnings test may reduce their benefits temporarily. However, once they reach full retirement age, any reductions are recalculated, leading to a bigger payout down the line.

2. Suspend your benefits for a bigger payout

If a person is between full retirement age and 70, they have the option to suspend their Social Security benefits. By doing so, they will stop receiving your monthly check, but the benefit amount increases by 2/3 of a percentage point for each month they suspend. Over time, this can lead to a boost of up to 26.7%, not including any COLA increases.

This option is particularly beneficial for individuals who claimed Social Security early but are now able to wait. If a person is in good health and expects to live a long life, suspending their benefits may result in significantly higher monthly payouts later. However, be aware that suspending benefits also means anyone receiving benefits based on the person’s earnings record, such as a spouse or dependent, will stop receiving payments as well.

3. Switch to spousal or survivor benefit

If a person is married, divorced, or widowed, switching from their personal benefit to a spousal or survivor benefit could increase their monthly check. Spouses are entitled to up to half of their partner’s primary insurance amount, provided the latter is already collecting benefits. If the individual is divorced, they can still claim spousal benefits as long as they have been divorced for at least two years.

Survivor benefits let widows, widowers, and eligible ex-spouses (married for at least 10 years and not remarried before 60) collect the higher benefit between their own and their spouse’s.

In some cases, it may be beneficial to start with the person’s own benefit and switch to the survivor benefit once it reaches its maximum value at full retirement age. This strategy can provide an increase in lifetime benefits, particularly for those in good health and expecting to live many more years.