4 Ways to Score Higher Social Security Benefits
Social Security is a key income source for millions of seniors today, and while it certainly shouldn't be your only means of paying the bills in retirement, the more money you're able to get from it, the better. The good news? There are steps you can take to score a higher retirement benefit. Here are a few to focus on at various stages of life.
1. Boost your skills to grow your earnings
The more money you make at your job, the higher your Social Security benefits stand to be. That's because those benefits are calculated based on your 35 highest-paid years of earnings. It pays to invest in growing your skills, because the more value you bring to your employer, the more likely your salary is to go up. You can boost your skills in a number of ways, whether it's taking classes, getting a professional certification, or even shadowing seasoned colleagues and picking up on the things they do best. Boosting your earnings by even a small amount could have a tremendous lifetime impact, since future raises will be based on a higher starting number.
2. Work a few extra years once your salary peaks
Many people start out with lower salaries and earn more as they advance in their careers. If your salary ends up peaking in your 60s, working a few more years than planned could boost your Social Security income if you're able to replace lower earnings on record with higher earnings. Similarly, if you took time off during your career and don't have a full 35 years of earnings under your belt, you'll have $0 factored in for each year without a salary. Replacing even a single $0 entry with an actual income figure will help you snag a higher monthly retirement benefit.
3. Delay benefits as long as possible
You're allowed to file for Social Security as early as age 62, but you have the option to wait all the way until age 70 to sign up (technically, you can wait even longer, but there's no point). Waiting until full retirement age, however, will ensure that you get the full monthly benefit your earnings record renders you eligible for. Full retirement age is either 66, 67, or somewhere in between, depending on the year you were born. Furthermore, if you delay benefits past full retirement age, you'll accrue credits that increase those payments by 8% a year. That can happen up until you turn 70, at which point that incentive runs out.
Imagine your earnings record entitles you to a monthly benefit of $1,600 at a full retirement age of 66. If you sit tight and wait until 70 to claim benefits, you'll wind up getting $2,112 a month instead -- for life.
4. Check your earnings statements
Every year, workers get an earnings statement from the Social Security Administration (SSA) summarizing their income and estimating their retirement benefits. If you're 60 or older, this statement should arrive in the mail, and if not, it's available on the SSA's website once you create your own account to access it. Reviewing your statements for errors could result in a higher monthly benefit if you spot a mistake that works against you.
For example, imagine the SSA has $40,000 of income on record for you in a year when you earned $60,000. That error could impact your benefit calculation if you don't correct it. Therefore, be sure to review your earnings statements thoroughly, and report mistakes to the SSA right away if you come across any.
Chances are, you'll depend on Social Security to some degree in retirement. Making an effort to boost your benefits could really pay off, not to mention save you a world of financial stress during your golden years.
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