Tips to maximize your lifetime Social Security benefits

Dear Savvy Senior: Can you recommend any online tools or services to help soon-to-be retirees figure out the best time to start collecting Social Security benefits? My wife and I are approaching retirement, and we don’t have much savings, so we want to make sure we choose a strategy that maximizes our lifetime benefits. — Need Some Help

Dear Need Some Help: When you start Social Security can make a big difference in your lifetime income, so it’s worth taking time to compare your options before you file. Here’s what to consider.

Key factors

You can claim Social Security retirement benefits as early as 62. But claiming before your full retirement age permanently reduces your monthly benefit.

For most people approaching retirement today, full retirement age is 67. If you claim at 62 instead of 67, your monthly benefit will be about 30 percent lower. On the other hand, if you wait past your full retirement age, your benefit increases by 8 percent for each full year you delay, up to age 70.

But age isn’t the only factor. Your health, family longevity, whether you plan to work in retirement, taxes and spousal or survivor benefits can all affect your decision.

For example, when one spouse is the higher earner, delaying that person’s benefits can increase the survivor benefit the other spouse may receive. That can be particularly important for married couples.

Social Security representatives can explain the rules and tell you how your benefits are calculated, but they generally won’t tell you when you should start collecting. That’s a decision you’ll need to make based on your own situation.

Gather information

A good first step is to visit ssa.gov/myaccount to get your personalized Social Security statement. It estimates your retirement benefits at different claiming ages based on your actual earnings history.

You should also consider how long you might need your benefits. A quick estimate is available at ssa.gov/oact/population/longevity.html. Knowing your potential life expectancy can help you weigh starting earlier for income against waiting for larger monthly payments.

It’s also important to look at your other sources of retirement income, such as pensions, savings and part-time work. These can affect how much you need from Social Security in your early retirement years.

Online calculators

Once you have your benefit estimates and a better idea of how long you might need your Social Security benefits, online calculators can help you compare different claiming strategies.

Open Social Security (opensocialsecurity.com) is a free tool that lets you compare different claiming ages and estimates which strategy might provide the most total spendable dollars over time.

Professional help

If you prefer face-to-face guidance, consider working with a fee-only certified financial planner who has experience with Social Security claiming strategies. They can help you compare different claiming ages and coordinate Social Security with your other retirement income.

Taking some time to compare your options now can help you make a more informed decision about when to claim. If you decide to delay your Social Security benefits, remember that you generally still need to deal with Medicare at 65.

Send your senior questions to: Savvy Senior, P.O. Box 5443, Norman, OK 73070, or visit SavvySenior.org.