Mary Anna Thomas

18 Common Missteps in Maximizing Your Social Security Benefits: What Many Retirees Overlook

Social Security is a vital source of income for most retirees in the United States, but the system can be overwhelming, leading many people to underclaim. Our guide to navigating the U.S Social Security will tell you all you need to know to maximize your retirement benefits:

Understanding Your Benefits

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The Social Security Administration (SSA) determines your monthly benefit amount based on your average indexed earnings over your 35 highest-earning years. In 2024, the maximum taxable earnings for Social Security is $147,000. If you worked under 35 years, the SSA will use zeros for the years you didn’t work.

Full Retirement Age (FRA)

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You can receive your full retirement benefit when you reach your full retirement age (FRA), based on your birth year. Here’s an outline of the FRAs for different birth years:

Understanding when you can claim your full Social Security retirement benefits, known as your Full Retirement Age (FRA), is crucial for maximizing your benefits. Your FRA is determined by your birth year. If you were born in 1943 or earlier, your FRA is 66 years. For those born in 1944, it’s 66 years and 2 months, and so on. For individuals born in 1950 or later, the FRA is 67 years. Knowing your FRA helps you plan the optimal time to start receiving benefits and avoid potential reductions in your monthly payments.

Maximizing Your Benefits

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Striving to earn as much as you can throughout your career, especially in your higher-earning years, is the best way to secure a stable financial future. This will increase your average indexed earnings and boost your benefits. Several strategies can help you maximize your Social Security benefits, including working for a minimum of 35 years and delaying your retirement.

Work for at Least 35 Years

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The more years you work, the higher your average indexed earnings will be, potentially increasing your benefit amount. The Social Security Administration (SSA) factors your average indexed earnings over your highest 35 years of earnings to determine your monthly benefit amount. Any years you don’t work result in zeros being used in the calculation, potentially lowering your average.

The Impact of Missing Years

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If you work under 35 years, the SSA will include zeros for the missing years, bringing down your average indexed earnings. This can significantly reduce your monthly benefit compared to someone who worked for 35 years.

Delay Your Retirement

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You will receive a higher monthly benefit if you can afford to delay your retirement past your FRA. Each year you delay your retirement past your FRA, your benefit will increase by 8%. You can delay your retirement until age 70, at which point your benefits will max out.

Maximize Your Earnings

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Try to earn as much as possible throughout your working years, especially in your higher-earning years, as this will increase your average indexed earnings and potentially boost your benefit.

Post Retirement Work

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Working part-time after reaching your Full Retirement Age (FRA) can boost your benefits if you’re healthy and able. However, be mindful of the earnings test, which can withhold some benefits if you earn above a specific limit before your FRA.

Be Aware of the Earnings Test

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If you begin receiving Social Security benefits before you reach your FRA, the SSA may withhold some of your benefits if you continue to earn income above a certain limit, which is adjusted annually.

Consider Spousal Benefits

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If you were married for at least ten years, you may be eligible to receive spousal benefits based on your spouse’s earnings record. Sometimes, the spousal benefit may be higher than your retirement benefit.

The Pie Analogy

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Imagine Social Security benefits like a pie. The bigger your average indexed earnings (the crust), the bigger the pie (your monthly benefit). Working for 35 years ensures an entire crust, allowing for the most giant pie. Missing years create gaps in the crust, resulting in a smaller pie (lower benefit).

Plan for Taxes Accordingly

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A portion of your Social Security benefits may be taxable depending on your total income. Be sure to factor in potential taxes when planning your retirement budget so you have an accurate outlook. While Social Security benefits are intended to provide financial security for retirees, some of those benefits may be taxable depending on your provisional income.

Provisional Income

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Provisional income is calculated by factors in your total income from all sources, including:

Social Security benefits


Wages (if you’re still working)

Interest income

Dividend income

Rental income

Taxable Threshold

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Once your provisional income exceeds a certain threshold, a portion of your Social Security benefits becomes taxable. In 2024, if your provisional income is:

Below $25,000 (single) or $34,000 (married couples filing jointly): No taxes are applied to your Social Security benefits.

Between $25,000 and $34,000 (single) or $34,000 and $44,000 (married): Up to 50% of your benefits may be taxable.

Above $34,000 (single) or $44,000 (married): Up to 85% of your benefits may be taxable.

Alternative Requirement Income

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Social Security shouldn’t be your sole source of retirement income. To create a diversified retirement portfolio, you can explore options like pensions, IRAs, and 401(k)s. If you worked for a company that offered a pension plan, you might receive monthly pension payments in retirement. These payments are separate from Social Security and are unaffected by your current income or assets. 


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You can also look at annuities alongside any Social Security financing. An annuity is an insurance product that provides a guaranteed income stream for your lifetime. You can purchase annuities with a lump sum of money, and they can be a valuable tool to ensure a steady income stream in retirement.

Reverse Mortgages

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A reverse mortgage allows homeowners 62 and older to access a portion of their home equity as cash payments. This can be a way to supplement your income in retirement, but it’s essential to understand the risks involved, such as the possibility of owing more than the value of your home.

Delaying Social Security 

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The advantages of delaying Social Security include:

Higher Monthly Benefit: Each year you delay claiming benefits past your FRA (up to age 70), your benefit increases by 8%. This can significantly boost your monthly income and provide a safety net throughout retirement.

Potential for Spousal Benefits: If you are married and your spouse claimed benefits early, delaying your claim can maximize their spousal benefit amount, which is based on a percentage of your benefit.

Greater Flexibility: Delaying benefits allows you to tap into other retirement savings or continue working, potentially reducing your dependence on Social Security immediately.


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The disadvantages of delaying Social Security include:

Lower Lifetime Benefits (Initially): Delaying your Social Security benefit will mean you’ll receive fewer total benefits in the early years of retirement since you won’t be collecting

Opportunity Cost: By delaying benefits, you miss out on potential income that you could receive earlier in retirement.

Health Uncertainty: If you have health concerns, you may not live long enough to recoup the benefits of delaying.

Creating a ‘My Social Security’ Account

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Instead of rushing into claiming benefits, carefully consider your financial needs, life expectancy, and plans before making a decision. The SSA website and a financial advisor can be valuable resources in navigating your claiming options. The SSA offers a secure online account ( to view your earnings history, estimate future benefits, and manage your Social Security account.

Getting Help from a Social Security Representative

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If you have questions about your Social Security benefits, contact the SSA or your local Social Security office. Each office has its phone number, which you can find using the SSA’s office locator tool ( Understanding your Social Security options and implementing strategies to maximize your benefits can ensure a more financially secure retirement.

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