Your Social Security Strategy: 3 Ways To Optimize Every Dollar in Retirement
Written by
Stacy Sare Cohen
Edited by
Zuri Anderson
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An average of 69 million Americans will receive a monthly Social Security benefit in 2025, totaling $1.6 trillion, according to the Social Security Administration (SSA). Out of that number, nine out of 10 (58.1 million) people 65 and older received $102.3 billion in benefits with an average monthly check of $1,975.
Still, many people don’t understand the rules and nuances of the program and aren’t always aware of the benefits they may be entitled to. GOBankingRates reached out to financial expert John Vandergriff, owner and wealth planner at Blue Ridge Wealth Planners for insight on how to optimize every dollar in retirement.
Here are ways seniors can make the most of Social Security.
Tap Into Spousal Benefits
A smart Social Security strategy is to tap into spousal benefits. If you’re married, divorced or widowed, you may be entitled to a higher Social Security benefit amount than what you’re currently receiving.
For example, if one spouse in a marriage is the “sole or primary earner, they can receive additional retirement income, and these benefits can be as much as half of the higher-earner’s benefit at full retirement age,” said Vandergriff.
People who are divorced and haven’t remarried may be able to claim their former spouse’s benefit if it’s higher than their own — and if you’ve been married more than once, you can typically choose the ex-spouse with the highest benefit as your own.
Likewise, if you are widowed, the surviving spouse is eligible to receive their partner’s benefit if it’s higher than what they are already receiving, said Vandergriff.
Understand Your Earnings Limits
If you’ve reached full retirement age, there’s no limit to how much you can earn if you decide to continue working. However, if you collect early retirement, the SSA places a limit on what you can earn without it affecting your benefit.
For example, if you earn more than $23,400, the limit in 2025, your benefit will be reduced by $1 for every $2 you earn over the limit.
In the year you reach full retirement age, Social Security deducts $1 in benefits for every $3 you earn above the annual limit, counting only your income up to the month before you reach full retirement age, not your entire year’s income. After your birthday, you’ll be free and clear to keep 100% of your earnings.
It’s important to note that “up to 85% of Social Security benefits become taxable if you earn too much money,” said Vandergriff.
Wait To Claim and Collect More
You can begin claiming Social Security at age 62, however, if you wait to apply until your full retirement age, you will earn more as your benefit will increase. You can see the difference in earnings by month on the Social Security website.
“Claiming benefits before full retirement age can result in a permanent [monthly] reduction [for the rest of your life] by as much as 30% of your benefit,” said Vandergriff. “However, if you wait to claim [until] your full retirement age, your benefit will grow by as much as 8% per year through age 70.”
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