Social Security 2024: 5 Things You Can Do To Maximize Your Benefits in the New Year

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As we move through the new year, Social Security recipients will enjoy a 3.2% boost to their monthly benefits vs. what they received in 2023. This cost-of-living adjustment (COLA) is an annual change tied to the inflation rate as determined by the Social Security Administration (SSA).

While you don’t have any control over the amount of the annual COLA, there are some things you can do over both the short-term and the long-term to help maximize your benefits. Here are some steps you can take and some benefits you may be unaware of that can help you get your maximum allowable benefit out of the Social Security system.

Max Out Your Salary

One of the most important factors in determining the size of your Social Security benefit is your work record. The SSA only considers your 35 highest-earning years when calculating your payout, so it’s essential to maximize at least 35 years of your work history to get the biggest benefit.

While you can’t cram 35 years of high earnings into a single year, you can try to earn as much as possible in 2024 to build up your lifelong benefit, whenever you begin drawing it. Note that if you’re already drawing a Social Security check, the time for calculating your benefit has passed. Earning too much before you reach full retirement age can actually temporarily reduce your benefit, so it’s something you’ll want to be aware of.

Understand Your Claiming Options

The second critical factor in determining your Social Security benefit is the age at which you file for benefits. For those born in 1960 or later, full retirement age is 67. While you can claim Social Security as early as age 62, every year before full retirement age that you file for benefits will reduce the amount of your check.

For example, if you claim benefits at age 62, you’ll get about 30% less per month than if you wait until age 67. But every year that you wait to file from ages 67 to 70, your check will jump by 8%, to a maximum of 24% more than full retirement benefit.

If you’re currently considering retirement and trying to maximize your benefit, remember that the longer you wait, the more your check will increase, at least up to age 70. Best of all, this increase is permanent, lasting for the rest of your life.

Take Advantage of Spousal Benefit

Even if you never worked a day in your life, you may still qualify for Social Security benefits. If you’re married to a worker who is drawing benefits, you can start drawing spousal benefits as early as age 62, although you can maximize your earnings by waiting until your full retirement age. You can also qualify for Medicare starting at age 65.

Note that the most you can earn is the higher of your own Social Security payout or one-half the amount of your spouse’s benefit. You’ll also have to wait to file until your own full retirement age if you want to get the maximum benefit. If this is a decision you are weighing in 2024, you might want to consult with a tax or financial advisor to see that both you and your spouse are earning the top possible benefit in combination.

Claim Benefits as an Ex-Spouse

Many former spouses aren’t aware that they may be able to claim Social Security benefits based on the work record of their former husband or wife. While there are some qualification requirements, the benefits you receive may be even more than you could earn based on your own earnings history.

Essentially, you can qualify for benefits if you were married at least 10 years and if you’re at least 62 years old and unmarried. Just as if you were still married, the maximum payout you can receive as an ex-spouse is the higher of your own benefit or one-half of your ex-spouse’s.

Don’t Overlook Survivor Benefits

If you’re the widow, widower or dependent child of an eligible worker, you may be able to file for your own Social Security benefits. As with ex-spouse benefits, you may be eligible even if you never worked a day in your life. Specifically, these are the amounts that various eligible groups are entitled to:

• Surviving spouses who have reached full retirement age receive 100% of the primary benefit amount
• Surviving spouses age 60 to full retirement age receive 71.5% to 99% of the basic amount
• Surviving spouses age 50 through 59 earn a 71.5% benefit
• Surviving spouses of any age with a disability and caring for a child under age 16 receive 75% of the primary benefit amount
• Children under age 18 — or 19 if still in elementary or secondary school — or those with a disability receive a 75% benefit
• Dependent parents age 62 or older receive either an 82.5% benefit, if they are the sole surviving parent, or 75% each if there are two surviving parents

You can’t increase any of these benefits in the new year, but if you aren’t aware of them, you may be able to significantly boost your income if you are eligible.

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