How to get the most from your Social Security

This was originally published on Monday, June 15, 2015, in the Pacific Daily News.  Click here to subscribe to the PDN.

Q: I am several years away from sixty-two in which I can start receiving Social Security benefits. I have been told by friends that there are ways of increasing what you earn. Could you help me understand how?

A: Your friends are right. There are ways to increase how much you get monthly from your Social Security benefits. The big secret comes down to what age you are when you start your benefits. You are also right that you can start claiming your Social Security when you turn sixty-two. The age that you start claiming your Social Security benefits is most important.

As I mentioned earlier, you can start earning your Social Security benefits at sixty-two. Most people who are about ready to retire have a full retirement age of sixty-six and can put off claiming till seventy. If you start claiming your benefits at sixty-two you will lose about 25% of your full benefits for the rest of your life. If you wait until sixty-six you will receive 100% of your benefits. Every year after sixty-six that you don’t you don’t claim your benefits, you can add 8% to your full benefits. In other words the four years (70 – 66 = 4) you don’t claim your benefits you can increase your benefits by 32%. That is a lot of money that you can add to your retirement if you can wait until 70.

It sounds very simple, just retire at seventy. But there are other factors you should take into consideration;

Compare your tax benefits to your 401(k). The federal government has guaranteed that no more than 85 cents of each dollar is safe from taxation when claiming Social Security benefits. Many states do not tax Social Security income. Talk to a financial advisor about how much taxes you will be paying when withdrawing from your 401(k). Which one will save you on paying taxes? Decide whether the 401(k) or the Social Security benefits will cost you the less. If you contribute to a public sector pension, either local or federal, talk to a financial advisor, there are rules against double-dipping. Many teachers and other employees of state or local government could get less benefits no matter what age they teach.

Medicare vs your medical insurance. If you have health insurance through an employer and qualify for Medicare you may be required to start using Part A of Medicare and drop your employer health insurance. Usually Part A Medicare is good coverage for those without a complicated medical history. Can you afford not having your employer health insurance? Which plan works best for you?

Your health. What is your health like at the time you are starting your Social Security benefits? Does your family have a long life span or a short one? Review your family history, there are online surveys that you can take to give you a projected feasible lifespan. If you are married do the same for your spouse.

Family dynamics. How old are your children when you start claiming your Social Security benefits? Will they be school aged? They may be eligible for benefits till they are eighteen years old. If they are nineteen and still in high school a waiver can be made till they graduate or two months after turning nineteen – whichever comes first. A child could be biological, adopted, or a dependent stepchild.

Consider your spouse. Many widows who survive their spouse are eligible to survivor benefits. Most of the time it is women who are left behind and have a smaller Social Security benefit than their deceased spouse. Survival benefits are linked to the Social Security benefits received by the deceased spouse. If the surviving spouse waits to claim for their survivor benefits the higher the benefits they will receive.

Michael Camacho is president and chief executive officer of Personal Finance Center. He has more than 20 years of experience in retail banking and at financial institutions in Guam and Hawaii. If there is a topic you’d like Michael to cover, please email him at and read past columns at the Money Matters blog at


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