3 Strategies for Maximizing Your Social Security Benefit on Any Income

No matter how much money you have saved for retirement, you probably still want the largest Social Security checks you can get. After all, more money means a more comfortable lifestyle and maybe a nicer inheritance for your heirs. You probably know you can increase your Social Security checks by boosting your income, but that’s easier said than done for most people.

Fortunately, there are other ways to raise your Social Security checks. Here are three things you can do, no matter what your income is.

1. Work at least 35 years

The Social Security Administration looks at your average monthly income over your 35 highest-earning years when calculating your benefit. You can still get checks even if you didn’t work that long, but you might be disappointed in their size.

Those who haven’t worked for at least 35 years have zero-income years included in their benefit calculation, and even one of these can significantly reduce your checks. If you earn $60,000, adjusted for inflation, every year for 35 years, your monthly benefit would be about $2,178 per month, based on the current benefit formula.

But if you only worked for 34 years, your benefit would be about $2,132 per month. That’s because the 35th year in your calculation is a zero-income year. As a result, you get about $46 less per month. That might not seem like much, but over the course of 30 years, it amounts to $16,560 lost.

You can check how many years you’ve earned income by creating a my Social Security account and looking at your earnings record. If you haven’t worked at least 35 years yet, consider remaining in the workforce at least that long. Longer is even better because then your higher-earning years start replacing your lower-earning years in your benefit calculation.

2. Ensure your earnings record is accurate

Your earnings record lists how much money you’ve paid Social Security taxes on every year. That information comes directly from the IRS, so it’s usually right. But sometimes, people make mistakes that result in some or all of their annual income being reported incorrectly. Things like forgetting to notify your employer when you change your name or getting your Social Security number wrong on your employment paperwork can lead to an incorrect earnings record.

Mistakes could unfairly reduce your benefit. The example above illustrates what a single zero-income year can do to your Social Security checks. You don’t want to wind up with any of those by accident.

Check your earnings record at least once per year to make sure that everything there appears accurate. Just remember, the figures listed there show what you’ve paid Social Security taxes on, which isn’t always the same as your income. In 2021, for example, you only pay Social Security taxes on the first $142,800 you earn. In prior years, this number was lower. So high earners may find their earnings record doesn’t reflect their income at all, but it could still be correct.

If you do notice a mistake, you can submit a Request for Correction of Earnings Record form to the Social Security Administration, along with any documents you have that prove your income for that year. The Social Security Administration will evaluate your request and update your earnings record if appropriate.

3. Choose your starting age carefully

Understand your full retirement age (FRA): You can claim Social Security as soon as you turn 62, but if you want the full amount you’re entitled to based on your work history, you have to wait until your full retirement age (FRA). That’s 66 for those born between 1943 and 1954. Then, it rises by two months every year thereafter until it reaches 67 for those born in 1960 or later.

Every month you receive benefits before this age reduces your checks by anywhere from 5/12 of 1% per month to 5/9 of 1% per month. That might not seem like much, but it adds up over time. Those who start Social Security at 62 only get 70% of their full benefit per check if their FRA is 67, or 75% if their FRA is 66.

But this process also works the other way. Delaying benefits past your FRA increases your checks by 2/3 of 1% per month until you hit 70. After that, your checks won’t increase anymore. Those with a FRA of 67 can get up to 124% of their full benefit per check, while those with a FRA of 66 can get up to 132%.

Is delaying always best? If you don’t believe you’re going to make it past your 70s, you’ll get more out of the program by starting early. And sometimes, you can’t afford to delay benefits even if you want to. Therefore, delaying benefits isn’t always best.

Your my Social Security account has a benefit calculator you can play around with to see how much you could get from the program at various starting ages. If you’d like to find out which could get you the most money overall, multiply your estimated monthly benefit for each age by 12 to get your estimated annual benefit. Then, multiply this by the number of years you expect to claim.

For example, if you believe you’ll qualify for an $1,800 monthly benefit at your FRA of 67 and you believe you’ll live until 87, you’d have an estimated annual benefit of $21,600 and an estimated lifetime benefit of $432,000.

Even if you follow all of the tips above, you probably won’t be able to rely upon Social Security alone in retirement, so make sure you’re saving plenty of money on your own too. Starting right now is the best way to ensure you have a comfortable retirement.

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