Maximize Social Security Benefits: 3 Unknown Strategies

Social Security cards atop $20 and $100 bills.While collecting Social Security benefits may seem straightforward, there are actually several strategies for collecting benefits -- especially if you are married -- that can increase your retirement benefits.

There are three basic options for when to start taking Social Security benefits: You may begin taking benefits between age 62 and your full retirement age, you can wait until your full retirement age (which varies by age), or you can delay benefits and take them anytime up until you reach age 73. The longer you delay, the higher your benefit will be. If you are married, you have a fourth option: You can collect spousal benefits instead of collecting on your own record. If your spouse earned considerably more than you, this can be a very attractive choice. Check out information on spousal benefits.

While there are four basic options for collecting benefits, there are ways to combine these choices to provide even more options. Here are three of the top strategies that you can use to maximize your Social Security benefits:

File and Suspend

This strategy works for couples in which one spouse is ready to retire, but the other spouse is planning to continue working. A working spouse who has reached full retirement age can file for benefits and then immediately suspend them. Once the worker suspends benefits, the non-working spouse can begin receiving spousal benefits while the worker continues to work. The longer the worker delays retirement, the more delayed retirement credits they will accumulate. 

Claim Now, Claim More Later

Under this strategy, the spouse who earned less would claim early retirement benefits at 62 while the higher-earning spouse waited. The higher-earning spouse would claim a spousal benefit once they reached full retirement age. Then, at 70, the higher-earning spouse would claim the maximum amount of their retirement benefit and stop receiving the spousal benefit. 

Do-Over Rule

Suppose you reach early retirement age and have a short-term need for money. An individual who is 62 years or older can start collecting benefits but stop the benefits within 12 months of the start, repay the benefits collected, and then still be eligible for the higher benefit amount at full retirement age or older. It is essentially a one-year interest-free loan. If you take benefits early but are not able to stop the benefits within 12 months of starting, you can still suspend your benefits in order to earn higher benefits. For example, if you start collecting at 62 but no longer need the income once you reach your full retirement age, you could suspend benefits until 70. You won't get a complete do-over, but between your full retirement age and 70, you would earn delayed retirement credits, which would increase your ultimate benefit amount when you collect at age 70. 

Read all about these strategies in the book Get What's Yours: The Secrets to Maxing Out Your Social Security. Or use these tips to learn more about Social Security in general. If you want professional guidance, contact an elder law attorney near you.