1 of 3 blog posts covering Social Security strategies

As a financial planner, I know that Social Security benefits are (or will be) a critical source of retirement income for many of our clients (and most Americans), particularly those who are 55 or older. According to the Social Security Administration (SSA), in 2021, the average monthly Social Security retirement benefit for a retired worker is $1,557. If we assume the average retiree is receiving this benefit amount, and using the median income for households headed by someone 65 or older in the U.S. in 2019 (which was about $50,000, according to the U.S. Census Bureau), we can estimate that Social Security benefits would replace roughly 37% of pre-retirement income for the average retiree. For a married couple that percentage increases to about 60% to 70% of a married couple retirement income.

Over the next 3 weeks I will cover strategies you can take to maximize your potential Social Security benefit.

  1. Delay claiming benefits: In 2020, the average age at which retired workers started receiving Social Security retirement benefits was 64. By delaying the start of Social Security benefits beyond the full retirement age, individuals can increase their monthly benefit amount by up to 8% per year (up to age 70). This can be a particularly effective strategy for those who are in good health, are still working or have other sources of retirement income to draw from in the meantime. What other source of guaranteed lifetime income increases 8% per year from age 62 – 70?
  2. Keep on working: The latter years of our lives tend to be our peak earnings years. Social Security is based on a worker’s 35 highest-earning years. You may be able to boost your benefit by working longer if you’ll earn enough to replace one of your lower-paid years with a higher-paid one. Note: a woman’s income may be more likely than a man’s to increase later in life, increasing the potential payoff from continuing to work. In addition the latter years of the typically couples life they have the capacity to save more money for retirement (kids gone, mortgage retired) than at any time in their life. Since Social Security benefits increase at about 8% a year after age 62 AND these are the years that most couple can save a greater % of their income why stop working early.

Next week we will cover two more strategies to optimize your Social Security benefits.

If you have questions about when you should start Social Security, how to maximize your benefits, if you can even afford to retire then call our office (864-293-7452) and schedule a time to meet with one of our planners.


Dave Conley, CFP