If I Could Tell Retirees 1 Thing About Social Security Right Now, It Would Be This

Key Points

• Your claiming age will determine the monthly and lifetime Social Security benefit you receive.

• You must wait until your full retirement age (FRA) to get the full benefit you qualify for, based on your work history.

• There are ways to grow your Social Security benefits once you've already applied.

• The $23,760 Social Security bonus most retirees completely overlook ›

I don't have to know much about you to know that you want your Social Security benefits to go as far as possible in retirement. Even if it's not your only source of retirement income, you still want to stretch it as far as you can to preserve your personal savings or enjoy a higher standard of living.

If you've already left the workforce, you might not think there's anything you can do to influence the size of your checks. But that might not be true. While your income throughout your career undoubtedly plays a role in determining your benefits, there's another element with an equally important role in shaping how much money you get from the program.

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Don't underestimate the power of timing

The Social Security Administration determines the size of the checks you qualify for based on your average monthly earnings over your 35 highest-earning years, adjusted for inflation, and the benefit formula in place in the year you turn 60. The result is known as your primary insurance amount (PIA).

For many, your PIA isn't the same as your benefit. To claim your PIA, you must wait until your full retirement age (FRA) to apply for Social Security. This is 67 if you were born in 1960 or later. Some older adults have younger FRAs.

Applying under your FRA is considered claiming early, and the Social Security Administration reduces the size of your monthly benefit by up to 30%. That's enough to drop a $2,000 monthly benefit to $1,400 per month.

You also have the option to delay retirement benefits past your FRA, and your checks will grow a little each month until you qualify for your largest benefit at 70. This is not an option for spousal Social Security benefits.

This makes timing your Social Security claim especially important if you hope to take home your largest lifetime benefit. A National Bureau of Economic Research (NBER) study found that more than 90% of Americans would get their largest lifetime benefit by waiting until 70 to sign up. But that's often easier said than done.

You may not be able to afford to delay Social Security. In that case, you're better off signing up early, even if it means settling for a smaller lifetime benefit, than falling into debt. Or perhaps you could delay benefits for a couple of months or a year to minimize the early claiming penalty without straining your budget too much.

Poor health is another reason you may prefer to claim Social Security early. Those who don't expect to live past their 70s often get a larger lifetime benefit by claiming as soon as they can.

Once you've made your decision about when to apply for benefits, you're generally locked in for the rest of your life. However, there are still two ways you can boost your future checks if you really want to.

How to boost your benefits once you're already claiming

If you've signed up for Social Security in the last year, and you now regret that choice, you may withdraw your Social Security application. This is basically where you ask the Social Security Administration to stop sending you checks and act as if you'd never claimed before. The catch is, you have to pay back all the benefits you've received thus far, and any benefits that family members who are claiming on your work record have received too.

You won't be able to withdraw your Social Security application if you can't do this. If you're able to pull it off, you'll need a way to cover your retirement expenses on your own until you're ready to sign up again. And you'll want to think carefully before you apply next. Withdrawing your Social Security application is a one-time offer.

Your other option is to wait until you reach your FRA and then suspend your Social Security benefits. This is where you ask the government to stop sending you checks, either until you request that they begin again or you turn 70. You don't have to pay any benefits back to do this, but you will still need to find a way to go without your Social Security checks for a while. During the time you're not receiving checks, your benefits will grow by two-thirds of 1% per month, or 8% per year.

If you can't do either of these things, your checks will still increase a little each year due to the annual cost-of-living adjustments (COLAs). These increases typically take effect with the December payment, which you receive in January of the following year.

The $23,760 Social Security bonus most retirees completely overlook

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