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Social Security Updates and Key Strategies

Social Security Updates and Key Strategies

February 17, 2021

When you’re planning for retirement, knowing how to maximize your Social Security benefits needs to be a key part of your long-term strategy.

While Social Security benefits most likely won’t be the largest part of your retirement income, these payments will provide a foundation for many older, retired workers. Thinking through how you can take full advantage of these benefits is good for you, your family, and your survivors. Plus, when you deal with the government, you have to be on your ‘A game’ otherwise you could make some irreversible and costly mistakes.


First, here is a brief summary of updates for cost-of-living adjustments (COLA) for 2021:

  • The 1.3% cost-of-living adjustment (COLA) will begin with benefits payable to Social Security beneficiaries in January 2021
  • The maximum amount of earnings subject to the Social Security tax will increase to $142,800
  • The earnings limit for workers who are younger than "full" retirement age will increase to $18,960
  • The earnings limit for people reaching their “full” retirement age in 2021 will increase to $50,520
  • There is no limit on earnings for workers who are "full" retirement age or older for the entire year

Download the full Social Security fact sheet here.


There are many misconceptions and uncertainties about Social Security benefits abound. Since Social Security should just be one part of your retirement plan, delaying filing can maximize your Social Security benefit (use other savings first in retirement and delay claiming Social Security until later). Understanding how pensions and taxes could impact your benefits is crucial so you don’t end up with an unpleasant surprise. Here are some tips for claiming Social Security benefits:


  • Ask the professionals, and not just at the SSA

Even though the SSA provides information about your Social Security benefits, unfortunately you can’t count on it to be up-to-date and accurate. SSA representatives are often overworked and undertrained, and could give you information that costs you tens of thousands of dollars over the course of your retirement. Make sure you consult with your financial advisor or other financial professionals to confirm the information you received. If you do make a mistake and withdraw too soon, you can look into withdrawing your Social Security benefits application and repaying the money within the first 12 months of claiming. Then you’ll be working from a clean slate again.


  • Wait to collect

The longer you delay claiming your benefits, the larger the dollar amount will be when you do collect. If you’re the sole earner of your family or have the longer life expectancy, strongly consider this option as it’ll pay off more (literally) in the long run for you or your survivors. For every year you delay between the ages of 62 and 70 (or 60 for widow/ers), your benefit will increase 5 to 8%. So, if you can use other retirement savings during that time, your monthly payment could increase quite significantly.


  • Claim the lesser benefit now, claim the larger one later

If both you and your spouse have worked enough to qualify for SSI, and one of you or both are at full retirement age, you can take advantage of this strategy. This works best when the older spouse is the higher earner. Once you reach full retirement age, you claim only for your spouse’s benefits, and delay taking yours until the age of 70 or older. This approach will maximize lifetime benefits.



  • Divorced singles

If you were married to your spouse for at least 10 years before getting divorced, you are eligible to receive SS benefits using their work record if you are not remarried. This strategy works regardless of your ex-spouses claiming or marital status. If your ex-spouse isn’t claiming benefits yet, you’ll need to wait 2 years after the divorce to claim benefits as an ex-spouse. If your ex-spouse is claiming benefits, you can claim and collect immediately.



Pensions and Other Factors

Pensions and taxes have the potential to impact your retirement benefit. Review the resources below on pensions and other factors you should consider:

  • Windfall Elimination Provision (WEP): If you have a pension from a job for which you didn’t pay Social Security taxes, this policy may lower your retirement benefits.
  • Government Pension Offset (GPO): This policy affects benefits as a spouse, widow, or widower if you have a pension from a government job for which you didn’t pay Social Security taxes.
  • Income Taxes And Your Social Security Benefits: You might have to pay federal income taxes on your Social Security benefits in certain situations.


Working with a financial advisor can give you clarity into how to maximize your benefits as well as a sense of security knowing that you’re getting accurate information. You can check your benefits estimates here.

CONTACT an HMC Partners advisor today to start planning!


 Statistics were sourced from

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