PersonalFinance: Social Security strategies

By Linda Stern

WASHINGTON (Reuters) - There's more to Social Security than just paying in for decades and hoping you get some cash back.

Financial advisers are starting to wise up to new strategies that can help boost their clients' benefits by hundreds of dollars a month. Anyone nearing retirement age should be thinking very carefully about when and how they take their benefits to make the most of their bottom line.

"People don't think of their Social Security account as an asset, but it is," says Dean Barber, a Lenexa, Kansas, advisor. "It's an asset and you should plan accordingly."

He points out that a person qualifying for today's maximum benefit of $2,235 a month would need the equivalent of a $550,000 nest egg to generate that much monthly income for life, so they should learn how to handle it.

The strategies that Barber and other advisors advocate are not gaming the system -- they are legal and legitimate. These strategies aren't new, either, but they are little used and little understood. People leave thousands of dollars on the table because they don't know how to handle their benefits.

But before the strategies, come the basics. Here's what you have to know about Social Security benefits if you want to really make the most of them.

(1) Normal retirement age is now 66. That is the age at which you will receive full benefits. You can start Social Security as early is age 62, but your monthly benefit will be reduced by 25 percent or more if you start early. (see how much it will be reduced by checking the table at the Social Security website: here).

(2) Furthermore, if you start your benefits before your normal retirement age, they will be reduced for every dollar that you earn over $14,160, until you turn 66. Then you can make as much as you want without reducing your benefits. For full details, see here