Getting more money out of Social Security is actually pretty simple if you understand how the program works. Once you know the factors that affect the size of your benefit checks, you can start making decisions today that will pay huge dividends down the road in retirement.
These are five of the wisest moves you can make to maximize your Social Security benefits.
1. Work for at least 35 years
Your Social Security benefit is based on your average monthly earnings during your 35 highest-earning years, adjusted for inflation. That figure is known as your average indexed monthly earnings (AIME).
If you don't work for at least 35 years, the calculation for your AIME will include some zeros for those no-income years. That will significantly reduce your benefit.
Beyond the value of getting those zeros out of the average, working for more years often increases the size of people's benefits, as workers tend to earn more later in their careers than they did when they were starting out.
If you work for more than 35 years, those higher-earning later years will start to replace the lower-earning years in your AIME calculation, resulting in a larger final number, and bigger Social Security checks.
2. Boost your income
Anything you can do to raise your income today will also help increase your benefits later. This could mean pursuing promotions, switching employers, or starting a side hustle.
The only people this tip won't work for are those earning over $142,800 in 2021. That's the cap on income subject to Social Security taxes this year. Earning more than this won't raise your Social Security benefits because you're not paying Social Security taxes on income over this amount.
3. Verify the accuracy of your earnings record
Your earnings record is where the Social Security Administration keeps track of how much money you've paid Social Security taxes on over the years. You can view yours by creating a my Social Security account.
Check yours every year against your tax returns to make sure it's accurate. This is the information the Social Security Administration will base your benefit on, so if there's an error, it could unfairly reduce the size of your checks.
If you find any inaccuracies, fill out a Request for Correction of Earnings Record form and submit it to the Social Security Administration, along with copies of any documents that prove your real income for the year.
4. Consider delaying the date at which you start taking your benefits
While you can start collecting benefits when you're as young as 62, doing so will reduce your benefit by 25% if your full retirement age (FRA) is 66, and 30% if your FRA is 67.
If you want to claim what the government defines as the “full benefit” you've earned based on your work record, you must wait until your FRA — somewhere between 66 and 67, depending on your birth year.
Every month you delay taking your benefits, you increase the size of your checks slightly until you reach your maximum benefit at 70. That's 124% of your “full benefit” if your FRA is 67 or 132% if your FRA is 66.
Should everyone wait to claim Social Security?
Waiting to take Social Security benefits won't make sense for everyone. The sizes of beneficiaries' checks are adjusted so that no matter when you begin taking the benefit, you'll collect around the same amount from the program over the course of your retirement — if you have an average lifespan.
File sooner, and you collect more monthly checks, but smaller ones. File later, and you collect fewer checks, but for larger amounts.
When not to wait: If you have good reason to expect you won't live to that average age — around 78 or 79 — waiting to collect is probably not the right strategy for you.
When to wait: But if you live into your 80s or beyond, you'll end up with a larger lifetime benefit by delaying. If you believe you will — and you can afford to wait — you probably should.
You can see estimates of what your monthly benefit would be based on different claiming ages using the calculator in your “my Social Security” account.
To estimate your lifetime benefit, multiply the monthly check amount by 12, and then multiply that by the number of years you expect to be taking those benefits. For example, if you get a $1,500 monthly benefit and believe you'll live for 25 years in retirement, your estimated lifetime benefit would be $450,000. (That doesn't factor in the annual cost-of-living adjustments that Social Security makes for inflation, of course, but it's still a good ballpark estimate.)
5. Apply for spousal or survivors benefits
Seniors who are married to a worker who qualifies for benefits may be able to get Social Security checks even if they've never worked themselves. Spousal benefits are available to the spouses of qualifying workers as long as the worker is already claiming benefits and the spouse is at least 62. You can get up to 50% of your spouse's benefit at their FRA if this amount is greater than what you would qualify for based on your own work history.
Family members of deceased workers can claim survivors benefits as long as the deceased worker qualified for Social Security. How much the program would give you, and when you would be eligible for benefits, depends on your relationship to the deceased. Here's an in-depth guide to survivors benefits if you're interested in learning more.
To maximize your benefits, put as many of these tips to work as you can. Check in with yourself at least once per year to decide if you're happy with your Social Security strategy or whether you need to make some changes. Make sure you're adjusting your personal retirement contributions upward each year as well to give yourself the best chance of having enough money to cover all your expenses in retirement.
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