There’s a good chance you’ll end up relying on Social Security to some degree during retirement. It may not be your primary income source (especially if you manage to build a nice nest egg), but those benefits are apt to come in handy. And if you make these simple moves, you could end up with a higher monthly benefit to enjoy for the rest of your life.
1. Extend your career if your earnings have peaked
The monthly Social Security benefit you’re entitled to during retirement will hinge on what your earnings look like during your 35 most profitable years in the labor force. Now you may reach a point later on in your career where your salary is higher than it’s ever been. And if so, extending your career a bit could result in more Social Security income.
Imagine your lowest year of earnings within your top 35 has you bringing in a $50,000 salary, and you now earn $120,000 and are on the cusp of retirement. If you were to work one extra year, you’d add another year of much higher earnings to your benefit calculation, resulting in more money from Social Security once you retire.
2. Delay your filing beyond full retirement age
You’re entitled to your monthly Social Security benefit based on your income history once you reach full retirement age, or FRA. That age is either 66, 66 and a specific number of months, or 67. It depends on when you were born.
For each month you hold off filing for Social Security past FRA, your benefit gets a small boost. And for each year you delay your filing, your benefit increases 8%.
Once you turn 70, you can no longer grow your Social Security benefit, so there’s no sense in delaying your claim beyond that point, as doing so will only cause you to potentially lose out on benefits you’re eligible for. But if you’re able to wait until your 70th birthday to claim Social Security, you might enjoy a far more generous benefit for many years to follow.
3. Claim a spousal benefit if your partner was a higher earner and you were a lower one
It may be the case that you worked and are entitled to a Social Security benefit based on your wage history, but that you weren’t a particularly high earner. If that’s the case, but you’re married to a higher earner, you may be in luck.
Married people have the option to claim Social Security spousal benefits, and if you wait until FRA to do so, you’ll be entitled to half of the benefit your spouse collects. So, let’s say your own benefit will only pay you $1,200 a month, but your spouse is entitled to $2,800 a month. If you claim a spousal benefit, you can raise your monthly Social Security income by $200.
To be clear, you cannot collect your own Social Security benefit plus a spousal benefit at the same time — it’s either one or the other. But you can absolutely claim the higher of the two.
No matter how substantial a role Social Security plays in your retirement, it pays to get as much money out of it as possible. These moves could result in a higher monthly benefit — and more financial freedom during your senior years.
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