Tax Experts Share 9 Ways To Keep More of Your Social Security Check

For many retirees, Social Security represents a significant portion of their retirement income. With that, it’s only natural to want to see a higher dollar amount on your monthly check.

As you plan for retirement, you may be surprised to learn there are some things you could have overlooked. Knowing them will help you keep more money in your pocket. Here are nine strategies tax experts recommend to maximize your Social Security benefits.

Waiting to collect your Social Security benefits can help you boost your check amount.

“Social Security benefits increase for each month you delay taking them past your full retirement age (FRA), up until age 70,” says Chad D. Cummings, attorney and CPA in Texas and Florida.

“This increase is due to delayed retirement credits (DRCs), which add 8% per year to your benefit,” he adds. “For example: If your FRA is 67, but you wait until 70 to claim benefits, your monthly check will be 24% higher than if you had claimed at 67. If your FRA benefit is $2,000 per month, waiting until 70 boosts it to $2,480 per month for life.”

This strategy comes with a caveat. According to Cummings, delaying may not be the best strategy if you have a shorter life expectancy or have an immediate need for such income.

“Social Security benefits become taxable if your provisional income exceeds a certain threshold,” says Cummings.

Retirees filing single with a provisional income of $25,000 or less and filers married filing jointly with a provisional income of $32,000 or less don’t pay federal income tax on their Social Security benefits. This means earning less income from other sources can keep your Social Security check amount higher.

In order to minimize your provisional income, Cummings suggests prioritizing Roth conversions before claiming your Social Security. “Withdrawals from Roth IRAs do not count toward provisional income,” he says.

“Once you turn age 70½, you can donate up to $100,000 per year directly from your IRA to a qualified charity through a Qualified Charitable Distribution (QCD),” says Cummings.

This donation is excluded from your taxable income, but it does count toward your Required Minimum Distributions (RMDs). This might force you to withdraw funds that bump up your taxable income and increase the taxes you pay on your Social Security income.

John Adams, CPA and owner at Bridgewater Tax and Financial Consulting in Jupiter, Florida, says that establishing a strategic withdrawal plan from different account types can help reduce Social Security taxation.

“Accountants and financial advisors can work together to recommend withdrawing from taxable brokerage accounts first to take advantage of lower capital gains rates, then drawing from tax-deferred accounts up to the taxable Social Security threshold, and finally using Roth funds, which do not count toward provisional income,” Adams explains.

“By carefully structuring withdrawals and conversions, retirees can keep more of their Social Security benefits and lower their overall tax liability, ensuring a more financially secure retirement,” he says.

“Retirees who still earn income from consulting, freelancing, or small business activities can form a C-Corporation (C-Corp) to receive that income instead of taking it personally,” says Chris Rivera, CPA and founder of The Ecommerce Accountants.

“Since wages and self-employment income contribute to provisional income (which affects Social Security taxation), using a C-Corp can block that income from flowing directly onto the retiree’s personal tax return,” he says. “Instead, the C-Corp is taxed separately at a flat 21% corporate tax rate and can retain earnings within the company.”

This means that retirees can take a mix of salary and dividends instead of paying themselves a high salary, or they can allow the C-Corp to retain earnings to defer taxation.

Retirees can see a bigger Social Security check if they work longer. There are a few reasons for this, according to Logan Allec, a CPA and owner of tax relief company Choice Tax Relief.

“Since your Social Security benefits are based on your highest 35 years of earnings (indexed for inflation), if you keep working, and an additional year worked is one of your highest 35 years, then that alone may push your benefits upward,” he says.

“As most people know, you can start taking Social Security as early as age 62, but your benefits will increase the longer you delay taking Social Security, up to age 70,” Allec adds.

If one spouse earned significantly less than the other throughout the course of their working career, it could be wise to collect spousal benefits.

“In these cases, the "lesser earning" spouse may be eligible to collect up to 50% of their spouse's benefits as theirs,” says Allec. “Similarly, applying for and collecting survivor's benefits after the "higher earning" spouse passes away can possibly increase the surviving spouse's benefit amount.”

“If you were married for 10 years or more, divorced, and did not remarry, you are eligible to receive 50% of your ex-spouse's benefits,” says Jonda Lowe, personal finance author. “These benefits will replace your own Social Security benefit but if the ex was the breadwinner, this may be a surprise bonus when you go to apply for benefits.”

According to Lowe, you could be penalized if you work while receiving Social Security benefits.

“If paying tax on a tax isn't bad enough, if you take your benefits before you are full retirement age and continue to work, you will lose $1 for every $2 you earn if you exceed the annual limit, which is $23,400 in 2025,” she says.

“There is a slightly less restrictive set of penalties and limitations if you work in the year during which you reach full retirement age,” she adds. “Once you reach full retirement age, you can work as much as you like without losing any of your benefits.”

The right retirement planning strategies can help you stretch your retirement dollars further. As you prepare for your golden years, consider working with a competent tax professional to help you avoid wasting money on taxes in retirement.