Time Claims to Maximize Social Security Benefits

Social Security benefits have long been a critical part of Americans’ retirement income plans.

drawing of two runners on the road
(Image credit: Illustration by John W. Tomac)

Social Security benefits have long been a critical part of Americans’ retirement income plans. After all, the monthly benefits provide a stream of income that is adjusted for inflation annually and can’t be outlived. And now, with the decline of pensions and increasing life spans, Social Security is playing a larger role in shoring up retirees’ nest eggs. “Social Security payments are one of the biggest assets that most people have,” says Dan Keady, chief financial planning strategist at TIAA.

How you handle that income “has an important impact on an overall plan,” Keady says. For baby boomers, “using a more intelligent Social Security strategy can increase income over their lifetimes.” Some critical moves: Know your full retirement age, coordinate the timing of benefit claims with your spouse, and weigh the advantages of delaying your Social Security benefits.

As more baby boomers become eligible for benefits, some claiming strategies are disappearing, the full retirement age is increasing and the threat of future benefit cuts looms—but the rules for claiming retirement benefits have also become a little simpler. Under a 2015 law, for example, people born on or after January 2, 1954, are presumed to be applying for the highest benefit for which they qualify—whether it’s their own benefit or a spousal benefit—no matter what their age is when they claim. The law also phases out a strategy known as “restricting an application for spousal benefits,” which could boost a couple’s total payout by tens of thousands of dollars—but a small group of boomers still have a shot at using it.

These key moves can help you maximize your lifetime benefits—and help your nest egg go the distance.

Rachel L. Sheedy
Editor, Kiplinger's Retirement Report