Maximizing Your Social Security Benefits: A Guide (And a Social Security Benefits Calculator)

High-quality preparation is the name of the game when it comes to seamless retirement. Doing your homework ahead of time is key. This includes taking the time to understand (and, preferably, maximize) your Social Security benefits. 

Are there any decisions you can make now that can elevate your benefits? Here’s what you need to know—along with a handy Social Security benefit calculator to help you see your potential benefits in seconds.

What Are the Types of Social Security Benefits Available? 

Social Security benefits are designed to provide financial support during key life events. These include retirement, disability, and survivor benefits. Each type of benefit serves a specific purpose and helps individuals and families weather any storms that might come their way. 

Retirement Benefits: Your Path to a Secure Retirement

Social Security retirement benefits are calculated based on your work history. 

• Eligibility for these benefits: You can start receiving Social Security retirement benefits as early as age 62. However, claiming your benefits early can reduce the monthly amount compared to waiting until your full retirement age.  

Disability Benefits: Financial Stability During Challenging Times

Social Security Disability Insurance (SSDI) can provide a safety net for individuals unable to work due to certain qualifying disabilities.

• Eligibility for these benefits: You must have worked a specific number of years, paid Social Security taxes, and have a disability that is expected to prevent work for at least one year or result in death.

Survivor Benefits: A Lifeline for Loved Ones

Social Security survivor benefits offer financial assistance to eligible family members after the loss of a loved one who worked and paid Social Security taxes.

• Eligibility for these benefits: Social Security survivor benefits are available to spouses, children, and even dependent parents who relied on the deceased worker’s income.

Key Factors That Can Affect Your Social Security Benefit Amount

Those are the types of Social Security benefits you could be eligible for, but many factors can influence your payout. Here are some of the variables at play: 

Your Earnings History Is The Foundation of Your Benefits

Your benefits are calculated based on your 35 highest-earning years. Higher earnings during these years translate to larger monthly payouts.

If you worked fewer than 35 years, those missing years will qualify as zeros. This will lower your overall benefit amount. 

One possible way to maximize your benefit is to work additional years or opt for higher-paying work opportunities. In addition to netting you more resources in the short term, this will contribute to increased Social Security benefits later on. 

For Retirement Age, Timing Is Everything

The age at which you claim benefits significantly impacts your monthly payment.

Claiming your benefits at 62, the earliest possible eligibility age, can reduce your monthly benefit by as much as 30 percent.

Waiting until your full retirement age, which is typically around 66-67, can help you achieve more of your calculated benefits. 

Further, you can even delay benefits beyond your full retirement age to increase your subsequent payout. This strategy maxes out when you reach age 70. 

Are There Other Influences on Your Benefits? 

Yes, there are other influences on your benefits. These can include your marital status (which can make you eligible for spousal or survivor benefits) or whether you have a government pension. Pensions that aren’t covered by Social Security might reduce benefits through the Windfall Elimination Provision (WEP) or Government Pension Offset (GPO).

What About SECURE 2.0? 

The recently established SECURE 2.0 Act ushered in significant changes in the retirement savings system. 

These changes can help you save even more money for the future in specific ways. For example, the SECURE 2.0 Act can help you set aside more of a nest egg by: 

• Making it easier to save longer: The Act raises the age for required minimum distributions, allowing you to keep your retirement funds invested for a longer period before withdrawals are mandated. This can help your savings grow further and reduce reliance on Social Security as your primary income source.
• Adding bigger savings options for older workers: If you're closer to retirement, you can take advantage of increased catch-up contribution limits, allowing you to put aside more money to strengthen your financial foundation.

Ready to Maximize Your Social Security Benefits? 

Working toward the most Social Security benefits possible is much easier if you start with clear information and practical tools. Resources like this blog post and our accessible updates about the future of retirement savings can help, as can this Social Security benefits calculator.  

From timing your benefits strategically to leveraging the SECURE 2.0 Act, taking proactive steps today can ensure financial stability in the years ahead. Your wealth management team at BNC National Bank is here to help ensure that every financial move you make is aligned with your future needs.

Interested in learning more? Download our Guide to Retiring for comprehensive planning tips and discover how BNC National Bank can support your retirement journey today.