5 Classic Bits of Social Security Wisdom You Need To Maximize Your Benefits

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There is no shortage of opinions on Social Security and the role it plays in American life. Usually, those opinions fall into two basic camps: It is either a bedrock of retirement security and needs to be strengthened, or it’s an outdated model that should be drastically reformed.

No matter where you stand on the issue, Social Security isn’t going anywhere any time soon. Lawmakers who attempt to change or weaken the program usually run into a firestorm of opposition. As former President Dwight D. Eisenhower famously said nearly 70 years ago: “Should any political party attempt to abolish Social Security … you would not hear of that party again in our political history.”

A couple of generations later, President Bill Clinton weighed in with his own quote on Social Security in a televised discussion about the program: “For 60 years, Social Security has meant more than an ID number on a tax form; more than a monthly check in the mail. It reflects our deepest values — our respect for our parents and our belief that all Americans deserve to retire with dignity.”

If you’re looking for presidential wisdom on how Social Security should be viewed from a practical standpoint, it’s instructive to return to Eisenhower. He said the system “is not intended as a substitute for private savings, pension plans, and insurance protection,” but rather as a “foundation upon which these other forms of protection can be soundly built.” The best way to view it is as a supplement to private retirement savings accounts such as 401(k)s and IRAs.

Are You Retirement Ready?

Here are five other bits of Social Security wisdom that can help you maximize your benefits.

“Work longer — even for a year or two.”

This advice comes from a PNC Bank blog, which noted that your benefits are based on your top 35 years of earnings. If you have worked less than 35 years, a zero will be assigned to any non-earning years. PNC recommends working longer to “negate any zeros” and to take better advantage of your top earning years. This will help boost your benefits for life.

“Consider Social Security’s guaranteed benefit the foundation in a larger strategy for retirement security.”

This is one of the recommendations included in “Social Security For Dummies, 4th Edition,” by award-winning journalist Jonathan Peterson. It supports the earlier quote from Eisenhower that you should not look at Social Security as a way to fund your full retirement but as a way to support your other retirement savings. As previously reported by GOBankingRates, the average Social Security payment for retired workers is $1,825 a month — well below median earnings for full-time workers of about $4,400 a month and also below the median national rent of $1,937 a month. Relying on Social Security alone can be a recipe for disaster in retirement.

Are You Retirement Ready?

“Deferred spousal benefits rise in value between age 62 and FRA but they do not rise beyond that point.”

The above quote comes from “Get What’s Yours: The Secrets to Maxing Out Your Social Security,” a book by Laurence J. Kotlikoff, Philip Moeller and Paul Solman. If you plan to defer spousal benefits, holding out any longer “won’t hike your spousal benefits one red cent” except for the annual cost-of-living adjustment (COLA), the authors wrote.

“Consider delaying Social Security until age 70.”

As U.S. News reported, you can increase your payments if you delay claiming Social Security past your full retirement age and to age 70, when there is no more financial benefit to delay. Your monthly benefit will increase by 8% for each year you delay between your full retirement age and age 70.

“Make the bigger check as big as possible.”

This bit of wisdom comes from Barron’s, which noted that if you and your spouse are the same age, then one of you should wait as long as you can to claim Social Security to maximize your benefit. Barron’s used the example of two spouses who are both 62 and plan to start collecting Social Security in five years. Suppose one of you will be entitled to $2,000 a month in benefits and the other $3,000 a month. The spouse entitled to $3,000 a month should wait until age 70 to collect. The reason is simple: When one of you dies, the SSA gives the bigger benefit to the survivor and the smaller benefit disappears, meaning the survivor will have the bigger benefit for the rest of their life.

Are You Retirement Ready?

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