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October 10, 2014

Tips for Maximizing Your Social Security Income


By Retirement Dictionary Staff

According to the Social Security Administration, over 59 million Americans will receive Social Security benefits in 2014. This will increase in the coming years. If you are one of the many individuals who will be eligible for Social Security soon, the following are just a few of the steps that you can take to maximize your benefits.

Don’t Start Early

You can start receiving your Social Security benefits at age 62. However, starting before you reach your full retirement age may result in a reduction in your benefit amounts. As such, unless you need your Social Security benefits to cover your living expenses, it may be worthwhile to wait until you reach your full retirement age.

The full retirement age for Social Security is between age 65 and age 67, depending on your year of birth. You may use the following table to determine your full retirement age.

Normal Retirement Age

Year of birth


1937 and prior



65 and 2 months


65 and 4 months


65 and 6 months


65 and 8 months


65 and 10 months




66 and 2 months


66 and 4 months


66 and 6 months


66 and 8 months


66 and 10 months

1960 and later


1. Persons born on January 1 of any year should refer to the normal retirement age for the previous year.
2. For the purpose of determining benefit reductions for early retirement, widows and widowers whose entitlement is based on having attained age 60 should add 2 years to the year of birth shown in the table.

Source: Table from

According to the Social Security administration, the reduction that applies if you start early can be as much as 30%. For example, a full retirement benefit of $1,000 per month can be reduced to $700 per month. This reduction would be permanent.

Financial Planning Reminder: While waiting until full retirement age would result in your payments being larger, your personal financial profile should dictate whether you start early.For example, if your Social Security benefits are necessary for ensuring that you can cover your living expenses, then you may have no choice but to start early. We can help you to decide which approach is suitable for you.

Defer Starting Past Full Retirement Age

If you defer receiving your Social Security benefits past your full retirement age, you will receive delayed retirement credit, which can increase your retirement benefits. This credit stops when you reach age 70, even if you delay receiving your benefits beyond age 70. The table below shows the delayed retirement credit for which you would be eligible, based on your year of birth.

Year of birth

Credit per year





















1943 and later


Note: Persons born on January 1 of any year should refer to the credit percentage for the previous year.

Table Source:

You must be fully insured in order to receive full credit. In general, you are considered to be fully insured if you have at least 40 quarters of coverage (credits). For 2014, you receive one credit for each $1,200 of earnings. You can receive a maximum of four credits per year. Note: If you do not have sufficient credits, you may be eligible based on the records of your spouse.

Maximize Your 35 Year Computation Period

When calculating your Social Security benefit amounts, the Social Security Administration uses your highest 35 years of earnings. You can replace low earning years by continuing to work. For example, if you do not have 35 years of work history, zero would be used for your non-earnings years. You can replace those amounts with current earnings.

Let us Help You

While maximizing your Social Security benefits may seem like an ideal objective, there are other factors to consider. This includes your other sources of income and whether strategies need to be implemented to minimize income taxes. Contact our office for assistance with designing a strategy that is most suitable for you.

Written By

Denise Appleby

Denise is CEO of Appleby Retirement Consulting Inc., a firm that provides IRA resources for financial/ tax/legal professionals. She has over 20 years of experience in the retirement plans field, which includes training and technical consultation.

Denise writes and publishes educational /marketing tools for advisors; available at Denise co-authored several books on IRAs

Denise is a graduate of The John Marshall Law School, where she obtained a Masters of Jurisprudence in Employee Benefits, and has earned 5 professional retirement designations.
She has appeared on numerous media programs, sharing her insights on retirement tax laws.


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