Your first step in maximizing your Social Security benefits should be to visit the Social Security Administration (SSA) website.
GET YOUR SOCIAL SECURITY ESTIMATES
The SSA website provides estimates for how much you'll collect if you start receiving benefits at age 62, your full retirement age (FRA) (between 66 and 67), and age 70. Remember that you don't have to start taking your benefits at those milestone ages; you and your spouse can start collecting anytime between ages 62 and 70.
Compare the estimates for you and your spouse, and pay special attention to the difference between your estimates. The higher earner is the spouse with the larger primary insurance amounts (PIA).
When you're deciding who will collect first and who should wait, consider having the lower earner collect first and having the higher earner wait. Over time, the higher earner's increases will be worth more than the lower earner's increases.
And if one spouse's estimates are more than twice as high as the other's, it might make sense for both of you eventually to collect on the same spouse's earnings record.
In that situation, the spouse with the lower benefits can claim first based on his or her own earnings record and apply for spousal benefits later when the spouse with the higher benefits starts to collect.
The longer the spouse with the higher benefit waits to start collecting, the higher benefits will be for both spouses. Delaying the higher earning spouse's benefits could also eventually increase the other spouse's survivors benefits.
Before you plug your Social Security estimates into your retirement plan, be sure to adjust those estimates if any of these factors apply to see how much you might actually end up with.
Working while you collect Social Security may temporarily reduce your benefits
You may pay federal & state taxes on your payments
As you consider the right time to start collecting Social Security, remember that if you decide to delay, you can revisit that decision as often as you'd like.
Anyone who's paid Social Security taxes for at least 10 years can start to receive retirement benefits as early as age 62 based on his or her own earnings record. A married spouse without an earnings record (or whose record would result in a lower Social Security payment) can collect on his or her spouse's earnings record when his or her spouse turns 62.
Collecting Social Security at 62 has some advantages. For example, you may be ready to retire and counting on Social Security as the cornerstone of your retirement plan. After all, if you've paid Social Security taxes for 10 years, then you're entitled to Social Security benefits.
If you or your spouse has serious health problems or a family history that suggests you may not live long enough to profit from waiting, collecting early might make the most sense for you. Just remember that if the higher earner delays, the surviving spouse's survivors benefits could also increase.
On the other hand, the earlier you start to collect, the less you'll receive each month. But if you start to collect and then change your mind, you have 2 options.
Within 12 months of starting to collect, you can "reset" your benefits to erase the reduction, but you must repay all of the benefits you and your family earned.
See how it works: The "reset" rule
If you started collecting before your full retirement age (FRA), you can suspend your benefits at FRA and restart them later.
See how it works: Voluntary suspension
Anyone who's paid Social Security taxes for at least 10 years can start to receive retirement benefits as early as age 62 based on his or her own earnings record. A married spouse without an earnings record (or whose record would result in a lower Social Security payment) can collect on his or her spouse's earnings record when his or her spouse turns 62.
Collecting Social Security at 62 has some advantages. For example, you may be ready to retire and counting on Social Security as the cornerstone of your retirement plan. After all, if you've paid Social Security taxes for 10 years, then you're entitled to Social Security benefits.
If you or your spouse has serious health problems or a family history that suggests you may not live long enough to profit from waiting, collecting early might make the most sense for you. Just remember that if the higher earner delays, the surviving spouse's survivors benefits could also increase.
On the other hand, the earlier you start to collect, the less you'll receive each month. But if you start to collect and then change your mind, you have 2 options.
Within 12 months of starting to collect, you can "reset" your benefits to erase the reduction, but you must repay all of the benefits you and your family earned.
See how it works: The "reset" rule
If you started collecting before your full retirement age (FRA), you can suspend your benefits at FRA and restart them later.
See how it works: Voluntary suspension
If you start collecting Social Security retirement benefits at your full retirement age (FRA), you'll receive 100% of your primary insurance amount (PIA). But remember that you can collect more than 100% of your PIA by waiting beyond your FRA.
You'll earn an extra 0.67% each month that you delay your Social Security benefits past your FRA. That's an extra 8% for each year that you wait past FRA … and what other investment can guarantee an 8% annual increase?*
Since it's unlikely that you and your spouse were born on the same day, the two of you will stagger your start dates if you both collect at your respective FRAs.
If you're planning on staggering your start dates anyway, consider delaying the higher earner's start date beyond his or her FRA, since the higher earner's payments will increase by a higher percentage as a result of waiting.
If you or your spouse (or even both of you!) can wait until you're 70, you'll receive your highest Social Security payments—up to 132% of your primary insurance amount (PIA) if your full retirement age (FRA) is 66, and 124% of your PIA if your FRA is 67.
Even if married couples start collecting on the same date, they're almost always different ages. Claiming at different ages is called a "split strategy."
Remember that the longer you wait, the more you'll receive—that's true for everyone. And if you decide that one of you will wait longer than the other to start collecting, it makes more sense for the higher earner to wait.
In other words, the split strategy that many couples use is to have the lower earner collect first for as long as the couple can manage their finances on one Social Security payment. Then, when the higher earner begins to collect, his or her payments will have increased more than the lower earner's would have, and the surviving spouse's survivors benefits would also increase.
See how it works: Split strategy
Even if married couples start collecting on the same date, they're almost always different ages. Claiming at different ages is called a "split strategy."
Remember that the longer you wait, the more you'll receive—that's true for everyone. And if you decide that one of you will wait longer than the other to start collecting, it makes more sense for the higher earner to wait.
In other words, the split strategy that many couples use is to have the lower earner collect first for as long as the couple can manage their finances on one Social Security payment. Then, when the higher earner begins to collect, his or her payments will have increased more than the lower earner's would have, and the surviving spouse's survivors benefits would also increase.
See how it works: Split strategy
If you or your spouse reached age 62 by the end of 2015, you qualify for a Social Security claiming strategy called restricted application.
Here's how it works: The younger spouse (who doesn't need to have turned 62 at the end of 2015) claims Social Security benefits based on his or her own earnings record.
When the older spouse (who must have been 62 at the end of 2015) reaches full retirement age (FRA), he or she files a restricted application for spousal benefits only. At that point, both spouses are claiming benefits based on the younger spouse's earnings record.
Then, at age 70, the older spouse claims benefits based on his or her own earnings record, which have increased to 132% of what that spouse would've been eligible for at FRA.
See how it works: Restricted application
Social Security provides more than just retirement benefits. And the federal government offers more than just Social Security benefits. As you put your retirement plan together, check to see whether you qualify for other government benefits, such as family and children services, tax assistance, and active military or veterans benefits.
You can file for Social Security benefits online, over the phone, or in person at a local Social Security Administration office.
If you're struggling with making your best Social Security decision, we can help. You'll also get a custom financial plan, ongoing portfolio management, investment coaching, and real-time goal tracking—all at a low cost.
CONSOLIDATE YOUR RETIREMENT SAVINGS AT VANGUARD
Make your life easier and let us help you reach your goal.
*The amount of your monthly benefits also increases for each month you wait between age 62 and your FRA, but the rate is lower than 8% per year and varies depending on your age.
All investing is subject to risk, including the possible loss of the money you invest.
Vanguard's advice services are provided by Vanguard Advisers, Inc. ("VAI"), a registered investment advisor, or by Vanguard National Trust Company ("VNTC"), a federally chartered, limited-purpose trust company.
The services provided to clients will vary based upon the service selected, including management, fees, eligibility, and access to an advisor. Find VAI's Form CRS and each program's advisory brochure here for an overview.
VAI and VNTC are subsidiaries of The Vanguard Group, Inc., and affiliates of Vanguard Marketing Corporation. Neither VAI, VNTC, nor its affiliates guarantee profits or protection from losses.