Social Security wasn’t meant to be a primary source of income for retirees when it was first created in 1935. It sought to provide an umbrella of protection for people who couldn’t save enough for retirement. Most Americans didn’t think much about Social Security, perhaps because they were living shorter lives and relying on guaranteed incomes.
6. Look into Children’s Benefit Payments
Suppose you are retired, get Social Security benefits, and have dependent children under age 19. In that case, your children may be able to collect Social Security payments based on your work record. Those eligible may get up to half of a parent’s full retirement income, up to certain limits, each year.
Usually, eligible kids must be younger than 18, single, in full-time high school until 19 years old, or have incurred a serious disability before they turned 22.
Keep in mind that a family maximum limits how much a family can get based on the earnings record of one worker. The most a family can receive is between 150 percent and 188 percent of a worker’s monthly payout at full retirement age. If your total family benefits exceed the limit, the worker would still get a full check, but the payment would decrease for the kids.
Family benefits, like child and spousal benefits, are subject to Social Security’s earnings test. If the primary worker gets benefits early but still works, the payout may be cut or even removed.
7. Earn More if Possible
Whether you ask for a raise or secure a side job, earning more money may help protect you in the long run against risks like market instability, inflation, and taxes. If your wages consistently meet what the SSA refers to as the maximum taxable earnings, it will not tax you beyond that amount.
In 2023, this maximum taxable earnings cap is $160,200. Every year, the limit adjusts; in 2024, the limit will rise to $168,600. Let’s say your wages met the maximum taxable earnings limit for 35 years and you also held off on filing for Social Security until full retirement age. You would likely be among the few retirees to qualify for Social Security’s highest possible benefit payout.
This may not prove achievable for many workers. That’s why it’s crucial to pursue any number of other strategies that can help boost your retirement income.
For example, waiting until full retirement age to file means you’ll be paying more Social Security tax over time. Paying a bit more in taxes could later lead to a steady stream of higher income that considers inflation and helps to settle debt, pay for education, and meet household emergencies.
8. Lower Your Social Security Taxes
You may need to pay federal income taxes on some of your Social Security in retirement.
If your annual combined income is between $25,000 and $34,000 (or between $32,000 and $44,000 for a couple), you may have to pay taxes on up to 50 percent of your Social Security benefit. If your combined income totals more than $34,000 ($44,000 for a couple), up to 85 percent of your benefits may be taxable.
To get the most out of your retirement income and lower these taxes, there are plans you can pursue ahead of time to help reduce your combined income. For example, this might include having a Roth IRA from which to withdraw income, tax-free, during retirement. At a certain age, you may also consider making a charitable donation from your IRA. A qualified financial planner can assist you in figuring out a range of strategies that will best suit your situation.
9. Withdraw Your Social Security Application
You may not have realized that filing early for Social Security would ultimately reduce your benefits. Within the first year after applying for Social Security, you can change your mind and request to withdraw your application. You must do so in writing and pay back all the benefits you’ve earned. Note that you can only do this once.
Withdrawing your application is not the same as suspending your benefit. Once you hit full retirement age, you can suspend your benefits anytime by contacting the SSA.
10. Look Over Your Records
The SSA keeps a record of your Social Security earnings. You can sign up for a MySocialSecurity account to access your statements each year.
You can use your W-2 form, tax return, or pay stub to check your earnings history. Check your records and verify their accuracy.
If you need help navigating Social Security benefits, visit the SSA website, call the SSA at 800-772-1213 on weekdays.
