Social Security: 3 Ways to Beat the $1,657 Average Benefit

As it becomes more challenging to save for retirement, more retirees are leaning on Social Security benefits to make ends meet. However, the average benefit amount is only around $1,657 per month, according to the Social Security Administration (SSA), so your monthly checks may not go as far as you think in retirement.

Fortunately, you have a lot of control over how much you receive in benefits. If you’re aiming to earn a higher-than-average benefit amount, you have a few options.

1. Work a little longer

Your benefit amount is based largely on your income and the number of years you’ve worked. You’ll need to work and pay Social Security taxes for at least 10 years to be eligible for retirement benefits. But to earn as much as possible, you’ll need to work for at least 35 years.

The SSA calculates your benefit amount by taking an average of your wages during the 35 highest-earning years of your career. It then adjusts that number for inflation, and the result is your basic benefit amount.

Because most people see their wages increase as they get older, working more than 35 years can sometimes result in larger checks. The SSA only includes your highest-earning years in your benefit calculations, so by working a few more years when your salary is higher, you can earn a higher payment each month.

2. Delay benefits

Your basic benefit amount is how much you’ll receive by filing at your full retirement age (FRA) — which is either age 66, 66 and a few months, or 67, depending on the year in which you were born. By waiting until after that age to begin claiming, though, you’ll receive a bonus amount each month. In fact, if your FRA is 67 years old and you wait until age 70 to file, you’ll receive your full benefit amount plus 24% extra each month. In some cases, that can amount to hundreds of dollars per month.

Keep in mind, too, that your benefit amount is generally locked in for life once you file (except for annual cost-of-living adjustments). That means when you delay benefits, you’ll earn larger checks every month for the rest of your life.

3. Claim all the benefits you’re entitled to

Retirement benefits are the most common type of Social Security, but there are others, as well — including spousal benefits, divorce benefits, and survivors benefits.

Spousal benefits are sometimes available to married couples. Divorce benefits are for those who are divorced and currently not married. And survivors benefits are generally reserved for widows and widowers (though sometimes other family members, such as parents and children, are also eligible).

Not everyone is entitled to these benefits, and there are several requirements you’ll need to meet to qualify for any of these types of Social Security. However, if you are eligible, you could potentially receive hundreds of dollars more per month.

Social Security benefits can go a long way in retirement, and you could collect more than you think. By taking the right steps to maximize your benefit amount, you can head into retirement as prepared as possible.

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