How to Maximize Your Social Security

What every taxpayer should know

You can begin receiving your Social Security retirement benefit as early as age 62. But by putting off your benefit start date you can receive a check that is approximately 8 percent higher for each year you delay receiving your benefit.​

The basics
Full retirement age. Those born between 1943 and 1954 reach their full Social Security benefit payment at age 66*. This is called your full retirement age.
Early benefit penalty. Those same retirees can begin receiving their benefit at age 62. But if you start your benefits before reaching your full retirement age, the amount paid to you is permanently reduced.
Bonus payment amounts. But there is also a bonus for each year you delay receiving benefits past your full retirement age. Your Social Security benefit is increased by 8 percent per year.
The maximum cap amount. After age 70, the Social Security benefit is maximized. Further delay in starting your benefits adds no additional payments.

Is a delay worth the wait?
Here are reasons to delay receiving your Social Security benefits until you reach age 70:
You expect to live longer. If your parents and grandparents lived long lives, you may wish to delay receipt of your initial Social Security benefits. The opposite is true if you have a shorter life expectancy.
You do not need the income. If you are still working or have alternative income sources, it may be better to delay receiving your benefits. An 8 percent increase in monthly payments is a good increase versus other investment alternatives.
Your spouse has died. You will need to review the possibility of receiving survivor benefits based on your spouse’s earnings. Later, you could then start collecting your own Social Security retirement benefits based on your earnings.
Your benefits are taxed. If you have other income, your Social Security retirement benefits could be subject to income tax if you are not yet at the full retirement age.
Should you delay receiving your Social Security benefits? There often is not one answer that fits all situations. Consider reviewing your situation prior to making a decision.
* Full retirement age increases by two months each year after 1954 until reaching full retirement age of 67 for those born in 1960 or later.


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Mia Verc, CPA;  Janice Papais, CPA