Workers planning to claim Social Security benefits should know that several factors can affect the size of their monthly checks — both positively and negatively.
For example, claiming benefits before your full retirement age permanently reduces your monthly payments. But what can you do to increase them? Here’s what you need to know.
How to increase your Social Security benefits
One of the most effective ways to boost your Social Security payments is by delaying retirement benefits. That means waiting to claim benefits after reaching your full retirement age, the point at which you’re eligible to receive 100% of your scheduled Social Security benefit.
Your full retirement age depends on the year you were born. If you were born between 1943 and 1954, your full retirement age is 66. For those born between 1955 and 1959, it gradually increases, reaching age 67 for anyone born in 1960 or later.
How delayed retirement works
If you wait to claim benefits beyond your full retirement age, you can receive a larger monthly payment. People who delay claiming Social Security until age 70 can increase their monthly benefit by more than 20%.
According to the Social Security Administration, your benefit increases by 8% for every year you delay claiming after reaching your full retirement age, up to age 70. If your full retirement age is 67 and you wait until age 70 to file, your monthly benefit will be 24% higher.
Higher earnings can also increase your benefit
The Social Security Administration (SSA) uses your lifetime earnings record to calculate your retirement benefit. In general, the more you earned over your career — and the more Social Security taxes you paid — the higher your monthly benefit is likely to be.
Social Security calculates your retirement benefit using your 35 highest-earning years. Working longer can replace years with lower earnings or years with no earnings at all. If you have fewer than 35 years of covered earnings, the missing years are counted as zeros, reducing your average monthly benefit.
Each additional year of strong earnings can increase your Average Indexed Monthly Earnings (AIME), which in turn can raise your monthly Social Security payment.
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