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The monthly benefit you collect from Social Security could be just the thing that helps you manage well financially during retirement. Granted, you’ll need additional income on top of your Social Security checks to maintain a nice standard of living. But those monthly payments will no doubt be important, so it’s essential that you squeeze as much money as you can out of Social Security. But if you’re not well-versed in these three rules, you’ll risk locking in a lower benefit for your retirement.

1. How benefits are calculated

The monthly benefit you’re entitled to from Social Security is calculated based on your personal earnings record. To be more specific, your 35 highest-paid years of earnings will be accounted for.

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What this means is that if you don’t work a full 35 years, you’ll have a $0 factored in for each year you’re missing an income. Similarly, if you have many years of very low earnings, that, too, will be accounted for.

Once you learn how Social Security benefits are calculated, you can take steps to boost yours. Working a few extra years if you don’t have a full 35 under your belt is one option. Similarly, if your earnings are higher at the end of your career, working a few extra years could make it so you’re able to replace some lower earnings with higher ones in your personal benefits formula.

2. When you’re eligible for your full monthly benefit

You’re entitled to your full monthly Social Security benefit based on your wage history once full retirement age (FRA) arrives. That age, however, depends on your year of birth, and you can look at this table to see where it falls:

Year of Birth

Full Retirement Age




66 and 2 months


66 and 4 months


66 and 6 months


66 and 8 months


66 and 10 months

1960 or later


Data source: Social Security Administration.

Now you should know that you’re allowed to claim Social Security before FRA arrives. But for each month you sign up early, your monthly benefit gets reduced.

The earliest age to claim Social Security is 62. But if you file for benefits at that point, you’ll shrink them by 25% to 30%, depending on your exact FRA. If you don’t want to face a reduction in benefits, you’ll need to know your FRA.

3. That you’re allowed a do-over

Some people claim Social Security at age 62, or at an age that’s younger than their FRA, and regret it later. However, many are also quick to assume that they’re stuck with a lower benefit for life.

That’s not necessarily the case, though, because Social Security allows all filers one do-over in their lifetime. So, let’s say you sign up for benefits at age 62 but realize that was a poor choice. You can undo your filing by withdrawing your benefits application within a year and repaying all of the benefits you received, and then sign up for Social Security again at a later age.

Many people unfortunately don’t know that this rule exists. But it’s an option worth exploring for those who file for Social Security ahead of FRA and realize they couldn’t really afford to do so.

The more you know about Social Security, the better positioned you’ll be to make the most of it. Keep these rules in mind so you end up happier with the monthly benefit you lock in for your retirement.

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