4 ways to maximize your Social Security checks

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A substantial Social Security check can be a bulwark against economic insecurity as benefits will last for your lifetime and are somewhat protected against inflation. The coronavirus crisis has shown the importance of being prepared for economic uncertainty and stock market volatility, and maximizing your Social Security retirement benefits can help with that.

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But if you want the largest Social Security check possible, you need to know how to get it. And for most people, that means taking these four key steps.

1. Wait until 70 to claim benefits

Although you can get benefits as soon as you turn 62, this would mean much smaller checks for life. That's because the amount of benefits you get is determined by when you start your benefits, relative to the age designated as your full retirement age (FRA).

The year you were born dictates your FRA, which is between 66 and 67. Those who claim Social Security at exactly their FRA receive their standard benefit amount, while those who opt to claim earlier get smaller monthly checks. Waiting until after FRA, however, raises the amount of monthly income you get.

In fact, because of delayed retirement credits, your monthly Social Security check increases by 2/3 of 1% for each month of delay. While waiting only leads to an increase in benefits until age 70, you can raise your check amount by 8% per year between FRA and reaching that milestone.

2. Make sure you have at least 35 years of work history

The Social Security Administration (SSA) uses a specific formula to calculate the standard benefit amount you'd get at full retirement age. It gives you benefits equaling a percentage of inflation-adjusted average income.

But when calculating that average, the SSA always considers the 35 years in which you had the highest earnings. If you happen to work for fewer than 35 years, they don't change the formula — they just include years of $0 wages in the calculation.

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Zeros obviously drag down the average, so you want to be sure you've got at least 35 years of covered earnings to count. That means you need to work in a job subject to Social Security taxation for at least that long.

3. Keep working if you are earning a lot later in life

While you need a work history spanning at least 35 years to avoid having $0 earning years included in your benefit calculation, you may not want to stop at 35 years exactly. That's because it's common for most people to see their earnings rise over time, even after accounting for the impact of inflation.

If you didn't earn much your first years on the job, the wages factored in from those early years could drag your entire wage average down. But if you're earning a lot more now, you could opt to keep working and get an extra year or two on your work history to cancel out the early years. When your later years of higher earnings replace early years of low earnings in the benefits calculation, they'll bring up your average wage, and your benefits will go up along with it.

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4. Explore your options for claiming spousal benefits

Married couples should work together to maximize the value of combined checks coming into the household. For many couples, this means a lower-earning spouse claims benefits young while a higher-earner delays starting checks.

This strategy makes it possible to have some retirement money coming in for support while maximizing the higher benefit. After all, if one spouse is in line to receive a standard benefit of $1,000 and the other $1,500, an 8% annual raise on the $1,500 is going to be worth more.

Maximizing the higher earner's annual benefit also helps raise the amount of survivor benefits the last surviving spouse collects. So this strategy not only maximizes combined household income when both spouses are alive but can also help keep widows and widowers from a big decline in their household income.

Make smart choices when it comes to claiming your benefits

Social Security will probably make up a significant part of your retirement income. And unlike your investment account, you don't have to worry about your benefits running dry. While doing the four things on this list isn't always the best choice for everyone, it definitely makes sense to consider these strategies and see if they're the right choice for you.

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