How Lower-Income Americans Can Maximize Their Social Security Benefits

For many Americans, especially those with lower income, receiving the maximum Social Security benefit attainable is crucial to making ends meet during their retirement years. This is achievable with the right plan, valuable information, and proper timing. Here's how to get the most out of your Social Security benefits.

Create a My Social Security Account

The first step is to establish a My Social Security account on the official Social Security Administration website. This will allow you to verify your earnings history, estimate your benefits, and make necessary corrections, increasing your potential benefits.

Work for at Least 35 Years

Your Social Security benefits are calculated based on 35 years of your highest earnings. Therefore, if you have less than 35 years of work, the SSA includes zero-income years, which can lower your average. If you have already worked for 35 years, continue working. The higher income years will replace years when you had a lower income, boosting your benefits in the process.

Delay Claiming Your Benefits

Although you can start receiving Social Security benefits from age 62, waiting until your full retirement age (between 66 and 67 for most people currently nearing retirement) will increase your monthly benefits. If you're able to hold off until age 70, your monthly benefits continue to grow, thus maximizing your Social Security benefits.

Avoid Social Security Earnings Penalties

If you continue to work while receiving early benefits (before full retirement age), be aware of the income limit set by the Social Security Administration. If you exceed this limit, you may face temporary reductions in your Social Security benefits. Therefore, it might be beneficial to either keep your income below this limit or defer your benefits until full retirement age.

Coordinate Benefit Claims with Your Spouse

If you're married, coordinating your benefits with your spouse may help both of you to maximize your joint Social Security benefits. For example, one spouse could claim benefits at the full retirement age while the other delays claims until age 70 to accumulate maximum benefits.

Check Qualification for Supplemental Security Income (SSI)

Supplemental Security Income (SSI), a federal aid program administered by the Social Security Administration, provides additional financial assistance to people who are aged, blind, or disabled and who have little or no income. Understanding the qualification criteria and applying if you're eligible can supplement your retirement income.

Consider Professional Financial Advice

Understanding all of the rules and strategies related to Social Security benefits can be complex. It might be beneficial to consult with a financial advisor or a legal expert with a specialty in Social Security claims. They can provide tailored advice, ensuring you're receiving every penny you're owed.

Pay Attention to the COLA

Lastly, take note of the yearly Cost of Living Adjustment (COLA), a rise in benefits to counteract inflation. This adjustment, while seeming small, can add up over years, contributing to a more significant income in your retirement.

As you near retirement or even if you are in the middle of your career, becoming savvy with these strategic steps will assist you in navigating the complexities of your Social Security benefits. Remember, maximizing your benefits requires informed decision-making and careful planning. This guide aims to equip you with the knowledge to make sure that when the day comes to retire, you will be able to have the highest benefits attainable to enjoy your well-earned rest.