Social Security benefits are essential for millions of Americans, particularly retirees who rely on them as a significant source of income. However, many people may not realize that they are missing out on benefits they are eligible for. Whether due to a lack of awareness, misunderstanding, or failure to properly apply, there are several hidden Social Security benefits that can significantly increase your monthly payments.
In this article, we will explore some of these lesser-known benefits and how to claim them, helping you maximize the amount you receive from Social Security.
1. Spousal Benefits: A Hidden Gem for Married Couples
If you are married, you may be eligible to receive Social Security benefits based on your spouse’s work record, even if you have never worked yourself. This is known as the spousal benefit.
The Social Security Administration (SSA) allows spouses to receive up to 50% of the higher-earning spouse’s benefit, provided they meet certain age and eligibility requirements. If you have been married for at least one year, you may be able to claim spousal benefits, even if you have divorced, as long as your former spouse is eligible for Social Security benefits and you have been divorced for at least two years.
How to Claim:
- You can apply for spousal benefits when you reach 62 years old or older.
- If you are already receiving Social Security benefits based on your own work record, you can switch to your spousal benefits when they are higher.
Tip: If your spouse delayed claiming their Social Security benefits, you can still claim the spousal benefit at a later time, which will increase the amount you are eligible to receive.
2. Survivor Benefits: Financial Security After the Loss of a Spouse
Another crucial benefit available to surviving spouses is survivor benefits. If your spouse has passed away, you might be eligible for Social Security survivor benefits, which can provide you with a monthly payment based on your deceased spouse’s earnings record. This benefit is especially helpful if you are younger than your spouse and have children who are still dependent on you.
Survivor benefits can be claimed as early as age 60, or as early as age 50 if you are disabled. The amount of survivor benefits you can receive depends on your spouse’s work record and your age when you claim.
How to Claim:
- To claim survivor benefits, contact the SSA as soon as possible after your spouse’s passing. It’s important to provide the necessary documentation, including your spouse’s death certificate and proof of your relationship.
- If you are already receiving benefits, you may be able to switch to survivor benefits if they are higher than your current amount.
3. Child Benefits: If You Have Dependent Children
Social Security doesn’t only provide benefits to retirees and spouses—it also provides benefits for children. If you have dependent children under the age of 18, or up to age 19 if they are still in high school, they may be eligible for Social Security benefits based on your work record. This benefit extends to children who are disabled and are unable to work.
How to Claim:
- Your children must be unmarried and living with you to qualify.
- To apply, you will need to show proof of your child’s age and your relationship, as well as your own Social Security number.
Tip: Children can receive benefits even if their parents are not yet retired, as long as the parent is receiving Social Security or is deceased.
4. The “File and Suspend” Strategy: Maximizing Your Benefits (Before It Was Eliminated)
Previously, a strategy called “file and suspend” allowed higher-earning spouses to file for Social Security benefits and then suspend their benefits, allowing the lower-earning spouse to claim spousal benefits while the higher earner’s benefits continued to grow until full retirement age. However, the SSA stopped accepting new file-and-suspend claims in 2016. While the strategy is no longer available for those who have not already filed and suspended, it's still important to consider it if you are already receiving benefits.
How to Claim:
- If you are already receiving Social Security benefits and suspended your payments before April 30, 2016, you may still benefit from this strategy.
Tip: If you are already in the position to maximize benefits based on the file-and-suspend strategy, consult a financial advisor to discuss your options before making any changes.
5. Delayed Retirement Credits: Increase Your Benefits for Later Claims
If you are able to delay claiming your Social Security benefits past your full retirement age (which is typically 66 or 67, depending on when you were born), you can earn delayed retirement credits. This means that your monthly benefit will increase by 8% per year for every year you delay claiming your benefits up to age 70.
How to Claim:
- You can claim your benefits at any time after your full retirement age, but delaying until 70 will provide the largest increase.
- Make sure to calculate whether it is financially beneficial for you to delay based on your projected lifespan and retirement goals.
Tip: While it’s tempting to start claiming as early as age 62, the longer you wait (up to age 70), the more you will receive monthly, so consider delaying if possible.
Maximize Your Social Security Benefits
Understanding the full scope of Social Security benefits can make a significant difference in your retirement income. From spousal and survivor benefits to the potential for delayed retirement credits, there are several strategies you can use to maximize the amount you receive. By carefully planning and considering your options, you can ensure that you are getting the most out of your Social Security benefits.
Be sure to consult the Social Security Administration (SSA) or a financial advisor for more personalized advice, and don't hesitate to explore all the benefits you may be eligible for.
Tip: Regularly check your Social Security statement and update your information with the SSA to ensure you’re receiving the correct benefits.
Key Takeaway: Don’t leave money on the table—take action now to make sure you are claiming all of the benefits available to you!