If you’re planning for retirement, it’s likely you’ve considered how much you will lean on Social Security. In fact, a recent study from the Transamerica Institute, based on a survey of more than 10,000 U.S. adults, found that 32% of Americans expect Social Security to be their primary source of retirement income, underscoring just how heavily many retirees depend on the program.
Despite concerns about the program’s long-term viability, with trust fund reserves projected to be depleted in the next 6 to 8 years, Social Security remains vital to more than 70 million Americans.
Navigating the complexities of Social Security is essential for maximizing your benefits, so read on for 10 practical strategies to boost your Social Security income.
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1. Work at least 35 years
Although you might be eligible for Social Security benefits after working just 10 years, working longer can lead to a bigger check. The size of your benefit is based on the average of your 35 highest-earning years.
If you did not earn income and pay Social Security taxes for a full 35 years, your record will show zeros for each year that didn’t qualify. That brings down your lifetime earnings and usually results in a smaller Social Security benefit.
So, working longer helps you stretch your Social Security income.
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2. Pursue a high-earning career
Up to a certain point, the more you earn during your working years, the higher your benefit is likely to be once you are ready to tap into Social Security.
Of course, in addition to boosting your Social Security benefits, earning more also gives you the chance to save a bit extra for retirement.
3. Delay your benefits
It’s possible to collect a Social Security check as early as age 62. But filing for Social Security early will reduce the size of your monthly check.
For some people, particularly those with health conditions that might shorten their lifespan or those who simply need the money now, claiming early can make sense. But for many others, it can pay to wait until full retirement age or beyond to start receiving Social Security.
Full retirement age varies depending on when you were born. For example, those born in 1960 or later will not reach full retirement age until age 67.
If you are willing and able to delay claiming benefits beyond your full retirement age, the size of your monthly benefit will increase for each year you wait through age 70.
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4. Take spousal benefits, but delay your own
If you are married but don’t have enough working credits to qualify for your own Social Security benefit, you might qualify for spousal benefits. A spousal benefit equals up to 50% of your spouse’s benefit.
In marriages where a spouse was born before Jan. 2, 1954, it’s possible for the spouse to claim spousal benefits and let their own benefit continue to grow up through age 70. At that point, the spouse can switch to the higher individual benefit.
5. Structure your income so you won’t owe Social Security taxes
Many households earn enough income in retirement that a portion of their Social Security benefit becomes taxable. That reduces the amount of Social Security income that actually finds its way into their pocket.
It can pay off to sit down with a financial advisor and discuss whether there are ways to bring down your income and reduce or eliminate taxes on your Social Security benefit.
6. Look for mistakes on your Social Security earnings history
The income you earn over a lifetime has a big impact on your Social Security benefits. But after decades in the workforce, it’s possible for your Social Security statement to contain errors.
A mistake could lead to a lower benefit. So, sign up for your own account at the Social Security website and review your earnings history to make sure everything is accurate.
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7. Apply for survivor benefits
If your spouse or ex-spouse died, you might be eligible for survivor benefits. If they were eligible for a higher benefit than you, applying could help grow your Social Security check.
8. Suspend your benefit
If you decide that you took your Social Security benefit too early, you can choose to suspend the benefit temporarily. The suspension will likely increase the size of your benefit when you reinstate it later.
The rules for suspending your benefit can be a bit complicated, and you might have to pay back all the money you earned to date through Social Security. So, while this is not necessarily an easy process, it can be lucrative.
9. Find a financial advisor who understands Social Security
Social Security can be confusing. If you find your options and the decisions that come with them overwhelming, look for help from a financial advisor who understands the Social Security system.
The right advisor can help you make the most of your benefit.
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10. Continue to work later into life
As mentioned above, your Social Security benefit is calculated based on your 35 highest-earning years. If you continue to work later into life, you might be able to boost the size of your check over time.
For example, if you only have 25 years in the workforce, staying on the job another 10 years can help you replace 10 years of zeros with actual income. That helps boost your benefit.
And if you are earning a lot of money toward the end of your career, continuing to work a little longer could significantly increase the size of your Social Security check and help you get ahead financially.
Bottom line
As you prepare for retirement and gear up for claiming your Social Security check, a little bit of strategy can go a long way.
Take the time to get familiar with the details of your situation. Then, take some of the steps on this list to increase the odds that you will get the most out of your benefits.
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