Suze Orman’s 6 Best Tips for Maximizing Your Social Security Benefits

Suze Orman has spent decades talking to Americans about their retirement worries, from outliving their money to claiming Social Security too early. She's a two-time Emmy winner and the author of multiple No. 1 New York Times bestsellers, including "The Ultimate Retirement Guide for 50+."

She is very clear that there are no shortcuts with retirement. For most retirees, Social Security is a lifelong paycheck; it's not a bonus. Around two-thirds of seniors rely on it for more than half of their income.

For the majority of people, every decision about when and how to claim is a big deal. Suze Orman has a lot of solid, helpful advice to help those thinking about retirement to weigh up their options for a healthier, more resilient retirement plan.

Wait as long as you can to claim

Orman's core Social Security message is that waiting to claim if you can is one of the smartest financial moves you can make.

She says, "If you are in your late 50s and in good health, you should seriously consider the upside of delaying when you start." That's because every month you delay claiming beyond full retirement age (FRA), you earn delayed retirement credits that increase your benefit by around 8% per year.

Under current rules, if your FRA is 67, claiming at 62 permanently reduces your benefit to about 70% of your FRA amount. Waiting to claim until 70 boosts your FRA benefit to 124%, so you'd get roughly 24% more per month for life. That means that if you can wait to age 70 to file your claim, you'll receive around three-quarters more per month than if you claim at 62.

Focus on protecting your future older self

Orman has called taking Social Security at 62 "one of the biggest mistakes" many people make when they don't actually need the money yet. She repeatedly warns about the permanent 30% cut if you file at 62. But it goes further than just that 30% cut. That smaller check also means every future cost-of-living adjustment (COLA) is applied to a lower base.

Orman's advice is to treat 62 as the default. But, if you're still working, or you can bridge a few years with savings, part-time work, or a pension, she'd rather see you delay claiming and buy yourself a higher guaranteed income for the rest of your life.

She tells readers to "stop worrying about dying earlier. The risk you should be planning for is living a long life" and calls a higher benefit "a valuable insurance policy if you do live a long time."

She notes that if you reach your mid-60s in average health, there's a strong likelihood that you will live until your late 80s or longer. She encourages you to plan for a long retirement, the foundation of which is delaying when you claim.

Know your earnings record and aim for 35 solid years

As she puts it on her Women & Money podcast, "Remember your Social Security is figured on 35 years of earnings," which means years with no income get counted as zeros. Those years filled in with zeros drag your benefit amount down. Even one year has a big impact.

On her podcast, Orman warns listeners that "years with no earnings reduce your retirement benefits." She says that if you check your earnings record and see any low or zero years in your top 35, if you can, you should keep working a bit longer. That way, you can replace low-earning or zero-earning years with higher-paying ones that pull up your 35-year average and therefore increase your benefit.

You can check your earnings history online with your "my Social Security" account and correct any errors you find. It's worth reviewing your record annually, as the sooner you spot errors, the easier and quicker they are to fix.

Use work or savings to buy yourself time to delay

Telling people to just wait until 70 isn't helpful if they actually need income at 62. Orman recognizes this and frames the delay as something you have to plan for. She recommends thinking ahead about how you'll cover expenses if you don't file right away.

It could be that, if you have a good job and are in good health, you decide to stay in the workforce longer. Or you could drop to part-time work, consulting, or freelancing. Drawing from existing retirement savings to bridge the gap before you file is also a solid strategy.

The idea is to tap other income streams or resources before you touch your benefit. That way, your guaranteed, inflation-adjusted benefit amount is as high as possible before you file your claim.

Remember that every month you delay between 62 and 70, your future benefit increases a little, and this adds up substantially over time. If you can implement a modest bridge strategy, like tapping your 401(k) carefully or working just as much as you need to cover your needs, it's definitely worth considering. It can result in hundreds of extra dollars per month in Social Security benefits when you do claim. And that higher figure becomes your baseline benefit for the rest of your life, which every future COLA gets applied to.

Ignore scare-mongering headlines

Suze Orman is blunt about sensationalist headlines about Social Security running out. She writes, "It is not going broke. That is fearmongering. Shame on the media that uses that term."

She's right, too. It is true that the latest trustees' projections show the main retirement trust fund is now expected to be depleted by 2033. However, at that point, ongoing payroll taxes would still cover around 80% of scheduled benefits. And that's only if Congress does nothing to fix the situation.

Don't let panic-inducing headlines push you into a claiming decision that permanently shrinks your benefit. For most current and near retirees, the bigger risk is still outliving your money, not Social Security disappearing overnight.

Understand how working before FRA changes your benefit

Another big tip Orman frequently talks about is resolving confusion around working and claiming at the same time. If you claim before full retirement age and keep working, you can earn up to $24,480 before the earnings test kicks in.

Anything you earn beyond this amount, the SSA withholds $1 for every $2 you earn. In the year you reach FRA, you can earn up to $65,160 before withholding starts at a rate of $1 for every $3 you earn. The earnings test ends automatically at the start of the month in which you'll reach full retirement age.

However, Orman is keen to point out that you don't, in fact, "lose" this money forever. Instead, she says, "Once you reach your FRA, your benefit is recalculated to account for what was withheld." This is a valid way to boost a lower early filed benefit.

If you haven't filed yet, you plan to keep working, and your projected earnings are well above the earnings test limits, you may want to consider delaying filing to avoid a cycle of reduced checks and confusion. Plus, if you haven't filed and you amass a higher-earning year or two during this period, it can increase your overall benefit.

Bottom line

Suze Orman's Social Security advice boils down to some simple but important guidance. Don't automatically claim as soon as you reach 62 unless you need to. Plan for a long life and figure out how you'll manage big expenses as you age. Understand, check, and maximize your 35-year earnings record, and don't underestimate the effect of the earnings test if you file and work simultaneously.

And, most importantly, if you can, wait until 70 before you file. But only if you can meet your expenses in other ways while you wait. This advice helps you maximize your senior benefits for the rest of your life.

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