Want to know how to get the biggest Social Security check when you retire? I have guidance to help you.
Recent reports have scared people into thinking they will almost never be able to retire. Sure, a lot of people have trouble saving today for tomorrow. But in the midst of all the negative reporting on this, there are those who will be able to retire.
In fact, the overwhelming percentage of Americans will be able to. The question is: at what age?
Read more: 5 Social Security tips for couples
We went through two generational cycles where people were able to retire at the youngest time in human history versus average lifespan. Some people were retiring in their 50s because they had a pension and then Social Security later in life. So they never had to work another day in their lives. That meant people having 20 or more years in retirement.
Today, though, pensions are mostly gone and people are not saving enough. Relying on Social Security alone will not get the job done. Though if you haven't saved enough during your working years, that may be your only option.
So the question then becomes: how can you maximize that Social Security check?
Play the waiting game
In the past, it was very common to retire and take Social Security at 62. But every year you wait after 62, you have an imputed return of 8% per year on your lifetime benefit. So if you wait from 62 to 70, the amount that Social Security pays climbs dramatically. (Benefits no longer increase after 70.)
A new study out of Boston College finds that almost 90% of people will be OK at age 70 retiring. That's due in part to a bigger Social Security chunk, a shorter lifespan to cover in retirement, and people having more focus on saving for retirement the older they get.
Use an online calculator to help!
Whenever someone asks me when they should claim Social Security, my general advice always involves asking them how long the average life expectancy is in their family. By doing that, I'm asking them to bet on their lifespan.
But the truth is many of us will live longer than we would have imagined. Let's say you're married. The odds that one of you will make it to your 90s (when you're in your 60s) is much higher than you think.
So don't rely on mere guesstimates. AARP's interactive calculator allows you to pop in your specifics and it will give you a decision tree to help you figure out the optimal time to take Social Security. Check it out to help yourself or a parent.
If you are looking for a more comprehensive approach to give you specifics on when it would be best to start drawing on your social security, check out Maximize my social security. There are different levels of analysis that you can choose, but $40 gives you access to sophisticated software that helps determine the best time to start receiving your checks. They also offer a money-back guarantee if you aren't satisfied.
Don't forget the spousal benefits
Even if he or she has never worked under Social Security, your spouse may be able to get benefits if he or she is at least 62 years of age and you are receiving or eligible for retirement or disability benefits. He or she can also qualify for Medicare at age 65.
More info about spousal benefits is available at SSA.gov.
So we've already told you to claim under your spouse's Social Security number. But did you know you can also claim under your Social Security number too?
"Dual-earner couples who have reached their full retirement age can claim spousal payments and file again later based on their own work record, which will then be higher because they accrued additional delayed retirement credits," according to U.S. News & World Report.
Boost your earnings today
What you get from Social Security has everything to do with your 35 highest earning years. So you might consider negotiating a raise or taking on a second job, says U.S. News & World Report.
I can help you on the latter front. My Work from Home Guide has legitimate ways you can earn some extra money. None of the sites listed on my guide will make you rich, but they will help you supplement your existing income.
Consider buying long-term care insurance
Beyond the Social Security question, another consideration as you age is long term care (LTC) insurance. An LTC policy can be a smart decision for many people. It helps pay for long-term nursing home care or for in-home health care assistance when you get older.
I typically recommend buying LTC insurance in your late 50s or early 60s, but far too few people choose to buy it. Don't make this mistake. See my Long Term Care Insurance Honor Roll for a list of the top companies and more buying tips.
Never say "never"
As you can see, my general guidance is for you to start taking your Social Security benefits later rather than sooner. But that's just a general guideline. If you're 62 and you don't have a job or the possibility of any future income, then you'd probably want to take Social Security as soon as possible!
BONUS TIP: Direct deposit is your friend!
The days of getting your Social Security as a paper check ended in 2011. Today's recipient have to get their money either as direct deposit or on the fee-laden Direct Express Debit MasterCard.
My preference is for you to take the direct deposit. Don't worry if you don't have a traditional bank account; there are bank alternatives like the award-winning Bluebird from Walmart and American Express.