4 LITTLE-KNOWN SOCIAL SECURITY RULES THAT COULD EARN YOU THOUSANDS MORE

Social security benefits: Millions of Americans rely on Social Security to fund their retirement, yet few truly understand how their benefits are calculated, or how certain rules can help them take home more money. While income plays a major role, several lesser-known Social Security provisions can make a big difference in your monthly checks, as per a report.

Here are four key rules that could add up to thousands of dollars more in lifetime benefits if you know how to use them, as per The Motley Fool.

1. How your income shapes your benefit

The Social Security Administration calculates your benefits based on your average indexed monthly earnings (AIME), your inflation-adjusted average income over your 35 highest-earning years, as per The Motley Fool. That figure determines how much you’ll receive when you claim benefits.

If you haven’t worked for 35 years, the SSA fills the missing years with zeros, which lowers your average and, in turn, your benefit. Working longer, especially if you’re now earning more than you did early in your career, can replace those lower-earning years and boost your checks.

However, there’s a limit. Earnings above the taxable wage base, $176,100 in 2025, won’t increase your benefit, no matter how much more you make.

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2. Why timing your claim matters

When you claim your Social Security benefits has a big impact on how much you receive each month. Your full retirement age (FRA) is 67 if you were born in 1960 or later, as per the report. Claiming before that, as early as 62, permanently reduces your benefit. Those who start at 62 get 30% less than if they’d waited until their FRA, as per The Motley Fool.

On the other hand, delaying your claim beyond your FRA increases your monthly payments. For every month you wait, your benefit grows by two-thirds of 1%, adding up to 8% more each year, until age 70. That means waiting until 70 could make your checks 24% larger than claiming at 67.

For those who expect to live longer or who can afford to wait, delaying benefits can lead to significantly more money over a lifetime.

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3. How the earnings test could temporarily reduce your checks

If you decide to work while collecting Social Security before reaching your FRA, the earnings test may affect your payments. In 2025, you’ll lose $1 for every $2 earned over $23,400 if you’re under your FRA all year. If you’ll reach your FRA in 2025, you’ll lose $1 for every $3 earned over $62,160, though only the income you earn before your birthday month counts, as per The Motley Fool.

The good news is that this money isn’t gone forever. Once you reach your FRA, the government recalculates your benefit to credit back the amount withheld earlier.

4. How spousal benefits can increase your household income

If you’re married, you may qualify for a spousal benefit worth up to half of your spouse’s full retirement benefit. For example, if your partner’s benefit is $2,000 at full retirement age, you could receive $1,000.

You’ll only get the higher of your own retirement benefit or your spousal benefit, not both, and your spouse must have already started collecting their benefits, as per The Motley Fool.

Divorced individuals may also qualify for an ex-spousal benefit if they were married for at least 10 years, divorced for at least two, and have not remarried, as per the report. You can even claim this benefit if your ex hasn’t started collecting theirs.

You can claim spousal benefits early, but doing so reduces them by up to 35%. Unlike regular retirement benefits, spousal benefits don’t increase after your full retirement age, so there’s no reason to delay claiming them past that point, as per The Motley Fool.

FAQs

How does the government calculate my Social Security benefits?

Your benefits are based on your average indexed monthly earnings (AIME), your inflation-adjusted income from your 35 highest-earning years.

Can earning more money increase my Social Security checks?

Yes, but only up to a point. Income above the taxable wage base ($176,100 in 2025) doesn’t raise your benefit.