Top Social Security questions

Here are the top questions my clients ask about Social Security:

When can I collect Social Security benefits?

To collect, you need to be 62 or older and have paid into Social Security through your payroll deductions for a minimum of 10 years.

But just because you can collect payments immediately doesn't mean you should. Your personal strategy to get the most out of Social Security should depend on many factors, which I'll discuss later.

How much Social Security will I receive?

Your benefits are based on the payroll taxes you and your employers pay. Those taxes come out of your earnings, so the higher your earnings, the greater your benefits.

Even for top earners, however, the benefits are relatively moderate. The maximum Social Security benefit at full retirement age in 2024 is $3,822 per month.¹ Full retirement age is based on your birth date. For example, if you were born in or after 1960, your full retirement age is 67.

I recommend my clients get an estimate of their benefits long before they apply for them so we can start to plan how to maximize them.

How much can I earn while on Social Security?

Once you've reached full retirement age, you can earn as much as you want with no penalties.

Before your full retirement age, you can earn up to $22,320 per year (as of 2024) without having your Social Security payments reduced. Bad news: If you earn over this limit, your benefits will be cut. Good news: When you reach full retirement age, any withheld benefits will be returned to you in the form of higher monthly payments.

If you're within the calendar year when you'll achieve full retirement age but haven't reached your birthday month yet, the earnings limit is much higher: $59,520 for 2024.

Factors that can affect your strategy

You should carefully consider the following factors to decide your best Social Security strategy:

The Tax-Efficient Retirement Strategy is an exciting new retirement planning tool I can use to help optimize your Social Security benefits.³  It analyzes thousands of detailed financial projections to bring you a cohesive strategy for when to claim Social Security, as well as 2 other complex retirement decisions: whether you should take advantage of Roth conversions and which withdrawal order can help minimize your taxes so you can better meet your spending and legacy goals. Your recommended Social Security strategy considers various factors, including life expectancy outcomes, to help determine the optimal time for you and your spouse to begin collecting Social Security to maximize your lifetime benefit. 

How can I increase my Social Security benefits?

The easiest way to increase your monthly payments is to delay collecting. You won't get 100% of your benefits unless you wait until your full retirement age to claim. After your full retirement age, your benefits will keep increasing by 8% a year for each year you wait until you turn 70.

But there are other potential ways to increase your benefits as well.

If you're married. You and your spouse should coordinate your claims to maximize the benefits. Whether you claim at the same time or use a split strategy to claim at different ages, it usually makes sense for the higher earner to wait longer to collect. Over time, the higher earner's increases will be worth more.

If you're divorced and haven't remarried. You may be eligible to claim benefits on your ex's earnings record if you were married for at least 10 years.

If you're a surviving spouse. You can claim survivor benefits as early as age 60 if your spouse's earnings qualified them for Social Security. You also have the option to switch to your own benefits when you reach age 62 or older, if that strategy makes sense for you.

If you've started taking Social Security before full retirement age. Maybe you realized you'd be better off letting the benefit continue to grow. Or perhaps you decided to return to work or don't need the money for another reason. Here are 2 ways you can undo your decision, to some extent:

• Withdraw your application and pay back what you received. You can do this if it's been less than a year since you filed for benefits.
• Suspend your benefits once you've reached full retirement age. This is your option if it's been over a year since you filed. Your benefit amount will increase every year until you turn 70 or start to collect again.

Some of these strategies can be complicated and some—like withdrawing your application—can only be done once, so you want to make sure you get them right. A financial advisor can run different scenarios to help you understand the potential implications.

Here's more information to help you maximize your Social Security benefits.

What else affects my Social Security payments?

While you're strategizing ways to increase your benefits, keep in mind these things that can decrease them:

Ready to set your Social Security strategy?

Working with Vanguard Personal Advisor® gives you anytime access to advisors who are fiduciaries, meaning they're obligated to act in your best interest. We'll help you put together a Social Security strategy that makes the most of your benefits.

Start planning today