6 Steps to Take With Your Social Security Strategy Before Summer Ends

Summer is usually a quieter time for stocks, when the Federal Reserve "goes silent" and pauses its economic guidance between its mid-June and late-September policy meetings. That window is an ideal time to step back from stocks and review your Social Security strategies. Let's review six simple moves you can make to optimize those goals before the summer ends.

1. Get your ducks in a row

The first thing you should do is go to ssa.gov and download your latest Social Security Statement. You should check if your top 35 years of earnings -- used to calculate your baseline benefit -- are recorded accurately. Any missing or incorrect data can reduce your benefits.

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2. Maximize your Social Security benefits

If you start claiming your Social Security benefits at age 62, your monthly benefits will be permanently reduced by up to 30%. You can only receive the full benefit if you start claiming after your Full Retirement Age (FRA) of 66 to 67, depending on the year you were born.

For every year you wait after your FRA to start claiming benefits, you'll receive a permanent increase of 8% until you turn 70. Those annual increases cap out at age 70.

Therefore, it's a good time to review all of your liquid assets to see if you can cover your living costs during the "bridge" years between your 62nd birthday and your FRA. If you don't, it could be the right time to sell some of your non-liquid assets or allocate more of your portfolio to income-generating dividend stocks or fixed-income investments.

3. Weigh your portfolio against Social Security benefits

For most retirees, it's usually better to wait until the age of 70 to start claiming Social Security benefits. But if you have a high net worth or a low risk of outliving your assets, claiming your benefits earlier at 62 or FRA could reduce your dependence on your stock and bond portfolios.

So instead of liquidating stocks or bonds during market downturns to free up more cash, you can rely on your Social Security benefits and let your portfolio recover and grow. By allowing your core investments to compound, you can leave your heirs a larger inheritance.

4. Rebalance your stock portfolio

Speaking of your stock portfolio, it's likely the recent AI-driven gains in the tech and energy sectors caused some of your top stocks to drift away from their target allocations. Therefore, it might be time to rebalance your portfolio by pruning some of those winners.

If you're about to retire and don't want to actively manage your portfolio anymore, it could also be a good time to shift toward passively managed ETFs like Vanguard's S&P 500 ETF (NYSEMKT: VOO). Therefore, you can still be exposed to the S&P 500 -- which has generated an average annual return of 10% since its inception -- and not fret over individual stocks.

5. Maximize your catch-up contributions

Relying too much on Social Security checks is also a risky long-term strategy, since many analysts anticipate steep reductions within the next decade. The Committee for a Responsible Federal Budget, a Washington fiscal watchdog, recently warned that the federal government could reduce the average retiree's Social Security check by $500 in 2032 to cut costs.

If that happens, retirees will need to rely more on their IRAs, 401(k)s, and other retirement accounts. After the age of 50, you're allowed to make catch-up contributions -- which exceed your typical annual limits -- to those accounts. Those limits fluctuate by type of retirement account, but they ranged from $1,000 to $7,500 last year.

So if you're above the age of 50, have a few years left before retirement, and have some excess cash you'd like to lock up, it's a great time to max out those catch-up contributions.

6. Coordinate your claims with your spouse

If you're married, the higher-earning spouse should try to delay their Social Security claims until age 70 to maximize their benefits. If that spouse passes away first, then the surviving spouse can claim those higher benefits for the rest of their life, even if they aren't 70 years old. Therefore, a little planning today could go a long way tomorrow.

Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Vanguard S&P 500 ETF. The Motley Fool has a disclosure policy.