The Social Security Bonus – Separating Fact from Fiction

Is There Really a Social Security Bonus? Here’s What You Need to Know

When it comes to retirement planning, I’ve heard so many clients ask about the “Social Security bonus” they’ve seen mentioned online or heard about from friends. With rising costs of living and financial concerns, it’s no surprise that retirees and soon-to-be retirees are eager to find ways to maximize their benefits.

There are some false ideas about Social Security, but is there really a bonus? Let’s look at the facts and clear them up.

The Truth About the “Social Security Bonus”

Here’s the simple truth There is no official “Social Security bonus” program

Many articles and advertisements talk about a “$16,728 yearly bonus” or a “$6,000 Social Security bonus” – but these claims need careful examination These aren’t actual bonuses in the traditional sense, but rather refer to different strategies or recent policy changes that might increase your benefits.

Let me break down the different “bonuses” that are being discussed:

The So-Called “$16,728 Yearly Bonus”

This number seems to be marketing speak for the difference in benefits between starting to collect Social Security early and waiting until age 70. The research cited by GOBankingRates says that retirement benefits at age 2070% can be 2076% higher than benefits taken at age 20622% (accounting for inflation).

This isn’t a bonus – it’s simply the result of delaying your benefits. The Social Security Administration (SSA) has always used a formula where your monthly payment increases if you wait longer to claim benefits.

The “$6,000 Social Security Bonus” Claim

This refers to retroactive payments resulting from the Social Security Fairness Act, which eliminated the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO). These provisions previously reduced benefits for about 3.2 million people who receive pensions from jobs not covered by Social Security (like certain teachers, firefighters, police officers, and some federal employees).

Since WEP and GPO have been taken away, people who were affected are getting one-time payments of an average $6,710 to cover increases that happened before January 2024. These are being distributed through March 2025.

This isn’t a “bonus” available to all Social Security recipients – it only applies to those previously affected by WEP and GPO.

How Social Security Actually Works

To understand why there’s no actual “bonus,” we need to understand how Social Security benefits are calculated:

1. Earnings Record: Your benefit is based on how much you made each month on average during the 35 years you made the most money.

2. Age Factors: When you claim benefits affects your monthly amount:

   • Early retirement (age 62): Reduced benefits (up to 30% less)
   • Full retirement age (66-67 depending on birth year): 100% of your calculated benefit
   • Delayed retirement (up to age 70): Increased benefits (up to 24% more)

3. COLA Adjustments: Annual Cost-of-Living Adjustments that increase benefits to help keep pace with inflation.

Strategies to Maximize Your Social Security Benefits

While there’s no actual “bonus,” there are legitimate strategies to increase your benefits:

1. Wait Until Age 70 to Collect

This is the single most effective way to boost your benefit amount. By delaying from age 62 to 70, you can increase your monthly check by approximately 76%.

Only about 10% of workers wait until 70, but a paper published by the National Bureau of Economic Research found that claiming before 70 resulted in a median loss of $182,370 in lifetime household discretionary spending.

2. Increase Your Earnings

Social Security calculates your benefits based on your 35 highest-earning years. If you have years with low or no income, they’re factored into your calculation and lower your benefit.

Each additional year you work replaces a zero or low-earning year, potentially increasing your benefit. The maximum earnings subject to Social Security tax (the wage base) for 2025 is $176,100.

3. Claim Spousal Benefits Strategically

Married couples should be strategic about claiming spousal benefits. Unlike personal benefits, spousal benefits don’t increase if you delay payments past full retirement age (FRA).

The spousal benefit amount can be up to half of the higher earner’s benefit at their full retirement age. You’ll receive either this amount or your own benefit, whichever is higher.

Other Factors Affecting Your Social Security Benefits

Taxation of Benefits

Your Social Security benefits may be subject to income tax depending on your total income:

• 50% of benefits may be taxable if:

  • Filing Single with income of $25,000-$34,000
  • Filing Jointly with income of $32,000-$44,000

• 85% of benefits may be taxable if:

  • Filing Single with income over $34,000
  • Filing Jointly with income over $44,000

Spousal Benefits Details

If you’re married, divorced, or widowed, you should know these key facts about spousal benefits:

• You’re eligible at age 62 if your spouse/ex-spouse is collecting Social Security
• You can receive up to 50% of the retired individual’s full benefit
• You’ll get whichever is higher – your own benefit or the spousal benefit
• Surviving spouses can receive their deceased spouse’s full benefit
• Divorced individuals can qualify if the marriage lasted at least 10 years and they’re currently unmarried

The “$5,000 DOGE Dividend” Proposal

You might have also heard about a “$5,000 DOGE Dividend” check. This is completely separate from Social Security and refers to a proposal linked to the Department of Government Efficiency (DOGE), led by Elon Musk.

The concept suggests distributing 20% of government spending cuts (expected to be around $2 trillion) to taxpayers as one-time $5,000 checks. However, this remains a proposal with several hurdles:

1. The savings target of $2 trillion is uncertain (currently only $55 billion in savings reported)
2. Concerns about potential inflation effects
3. Requires congressional approval

This is not related to Social Security and remains speculative at this point.

What You Should Do Now

Here are some practical steps to ensure you’re maximizing your Social Security benefits:

1. Create your mySocialSecurity account at ssa.gov to see your personalized benefit estimates based on different claiming ages.

2. Review your earnings record to ensure all your work history is correctly documented.

3. Consider your health and longevity when deciding when to claim. If you expect to live past your early 80s, waiting to claim generally results in more lifetime benefits.

4. Coordinate with your spouse if married to maximize household benefits.

5. Consult with a financial advisor who specializes in retirement planning and Social Security optimization.

Bottom Line: No Free Lunch in Social Security

While I wish I could tell you there’s a secret bonus waiting for you, the truth is that Social Security doesn’t offer “bonuses” in the traditional sense. What’s often marketed as a “bonus” is really just describing the normal operation of the program or recent policy changes that only affect specific groups.

The best way to maximize your Social Security is through careful planning and strategic decisions about when to claim benefits based on your unique situation.

Remember, you’ve contributed to Social Security throughout your working life, so you deserve to make informed decisions that help you get the most from the program. Don’t fall for misleading claims about “bonuses” – instead, focus on understanding the program and making choices that align with your overall retirement strategy.

Have you been planning your Social Security claiming strategy? Or maybe you’ve heard about other “bonuses” that sound too good to be true? Drop a comment below and I’d be happy to help clear things up!