Homodyne detection is often used for interferometers based on nonlinear optical gain media. For the configuration of a seeded, "truncated SU(1,1)" interferometer Anderson, et al. [Phys. Rev. A 95, 063843 (2017)] showed how to optimize the homodyne detection scheme and demonstrated theoretically that it can saturate the quantum Cramer-Rao bound for phase estimation. In this work we extend those results by taking into account loss in the truncated SU(1,1) interferometer and determining the optimized homodyne detection scheme for phase measurement. Further, we build a truncated SU(1,1) interferometer and experimentally demonstrate that this optimized scheme achieves a reduction in noise level, corresponding to an enhanced potential phase sensitivity, compared to a typical homodyne detection scheme for a two-mode squeezed state. In doing so, we also demonstrate an improvement in the degree to which we can beat the standard quantum limit with this device. (C) 2018 Optical Society of America under the terms of the OSA Open Access Publishing Agreement