Social Security Planning: 5 Strategies to Maximize Your Benefits

By Chris Palabe, CFS®, AIF®

Whether you’re retired or approaching retirement, your Social Security benefits are likely to play a significant role in supporting your exit from the workforce. About 40% of Americans rely on Social Security for half their retirement income. That makes Social Security planning all the more important.

The average monthly benefit paid to more than 68 million Social Security recipients is $1,783.55. (1) People aged 65 and older spend an average of $1,697 per month on housing, which would take up nearly all of the average monthly Social Security benefit. (2)

Palabe Wealth works to create financial plans that help clients feel confident about their futures. We can offer valuable assistance with your Social Security planning. For starters, consider these five Social Security planning strategies that can help you maximize your benefits.

5 Strategies for Maximizing Your Social Security Benefits

If you’re looking for a bigger payout from the Social Security Administration, proper planning can help you acquire additional funds that many people leave on the table. According to the experienced financial advisors from Palabe Wealth, these five strategies can help you get more from your Social Security benefits:

1. Work for at Least 35 Years

Your Social Security benefits are calculated based on your 35 highest earning years. If you don’t work for at least that long, some zeros may go into the calculation used to average your benefits.

As you begin Social Security planning, understand that you’ll need to work for at least 35 years to keep those zeros out of the equation. It’s even better to work longer (provided you’re making more money) to knock lower-earning years off your average. 

2. Maximize Your Earnings Through Retirement Age

The more you pay into the Social Security system, the more you’ll get out (though there is a limit). For 2024, the maximum taxable income for Social Security is $168,600. That amount increases annually.

While tending to your Social Security planning, focus on trying to increase your salary each year. Scoring salary increases until your retirement can help boost the amount you receive in Social Security benefits.

3. Delay Taking Benefits Until at Least 70

You might not want to work until age 70, but it may be worth it to put off claiming your Social Security benefit until that age. Delaying your benefits until 70 can add 8% to your Social Security check for each year beyond your full retirement age (FRA).

FRA varies, but for those born in 1960 and later, FRA is 67. That would be an additional 24% added to your benefits check.

4. Don’t Claim Retirement Benefits Before Full Retirement Age

Opting to take your Social Security benefit before your FRA can reduce the size of the check you receive.

If you were born in 1960 or later, meaning your FRA is 67, your benefits check could be reduced by 30% if you choose to take your Social Security at age 62. If you were scheduled to receive $1,000 a month at FRA, you would only receive $700 each month instead at age 62. (3)

5. Make Use of Spousal Benefits

If you’re married, Social Security planning with the aid of a financial advisor from Palabe Wealth could present you with scenarios to consider regarding spousal benefits. Depending on your age, you could collect 32.5%–50% of your spouse’s benefit without reducing the size of their monthly check.

Get Dependable Help With Your Social Security Planning

If you’re thinking about retiring, Social Security planning with a financial advisor can help you maximize your benefits.

Many Americans don’t optimize their benefits checks. At Palabe Wealth, we specialize in Retirement Planning and Social Security Timing. Schedule a 20-minute introductory phone call or call us at 847-249-6600 to learn if we are the right fit for your financial goals.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA. (22-LPL)

Asset allocation does not ensure a profit or protect against a loss. (34-LPL)

All investing involves risk including loss of principal. No strategy assures success or protects against loss.

This material was prepared for Palabe Wealth Inc.’s use.

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(1) Monthly Statistical Snapshot, SSA.gov, August 2024

(2) Get More Money From Social Security: 7 Tips to Max Out Your Benefits, NCOA.org, June 4, 2024

(3) Starting Your Retirement Benefits Early, SSA.gov