The average Social Security benefit in 2022 is $1,661. That means your retirement checks would give you $19,932 in annual income to live on as a senior without supplementary income.
Obviously, you’re going to need more money than that. You should be working on saving a retirement nest egg that can serve as a secondary source of funds. But while investing for the future is essential, you can also take steps to boost your Social Security above this average.
Here are three things you’ll want to do if you’re hoping for a bigger payment each month from the Social Security Administration.
1. Work more than 35 years
Social Security benefits equal a percentage of the average wage you earned over 35 years. The Social Security Administration adjusts all of your wages for inflation and determines your average wage by looking at the 35 years when you earned the most money.
Most people have some years of low earnings when they first get started in their jobs. Or they may have years when they were unemployed for part of the time or took some time off to raise a family. If you have any low-earning years in your career history or if you worked for fewer than 35 years, your average wage that benefits are based on will be lower as a result.
If you can work longer than 35 years, you won’t have any $0 wage years dragging down your average wage. And if you’ve moved up the career ladder and are at the peak of your earning power, some high-earning years can replace low ones.
Of course, if you are making a lot less money now than you did earlier, this won’t apply to you — the extra years you’re now working won’t be included in your average benefit anyway if they aren’t part of your 35 best-earning years. But since people tend to make more money as they get older, chances are good that staying on the job for some extra time could help boost your benefit.
2. Earn as much money as you can
Obviously, if Social Security is calculating your benefits based on average wages, earning more money is going to go a long way toward increasing the size of your checks.
If you can earn more than the typical American does, your benefits should be bigger than the average Social Security check. And the more you can raise your income over a sustained period of time, the bigger the impact on your benefits.
3. Put off claiming Social Security
Finally, you’ll want to delay starting your Social Security checks as long as you can.
Benefits can start at age 62 and many people claim their payments right when they become eligible or soon after. The problem is, you have a full retirement age (FRA) when the standard benefit based on your average wages becomes available. If you begin getting benefits before FRA, this reduces the standard benefit you’re entitled to by as much as 30%. But if you do the reverse and wait longer, benefits keep getting bigger until age 70. You can end up raising your payments by 8% per year for each year you delay beyond FRA until age 70.
If you’re serious about beating the average benefit, try to wait as long as possible to get your first Social Security payment so delayed retirement credits can give your checks a boost. The good news is, it should be easier to do this if you’re putting extra years on the job to max out your average wages.
By waiting to start benefits and increasing your average earnings, you should hopefully be able to bring home higher Social Security checks than many of your peers.
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