If you want larger Social Security checks in retirement, your primary focus should be on increasing your income today and verifying that the government has an accurate record of your earnings history. Increasing your income directly increases your future Social Security benefits in most cases, while correcting mistakes in your earnings record prevents clerical errors from costing you hard-earned money.
Here’s a closer look at the three most important steps you can take right now if you want to maximize your future Social Security benefits.
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1. Correct errors in your earnings record
You can view your earnings record — the record of how much money you’ve paid Social Security payroll taxes on throughout your career — by creating a free my Social Security account. It’s worth looking over your earnings record every year for mistakes, particularly years where the Social Security Administration shows no income when you know you’ve worked. Missing income could reduce the future benefit you’re eligible for.
If you notice any mistakes in your earnings record, contact the Social Security Administration immediately. Submit a copy of your tax records from the year showing how much you actually earned.
One note for high earners: The Social Security Administration doesn’t assess payroll taxes on all your income each year. If your income exceeded the taxable wage base for a given year, your earnings record will correctly show this number instead of your actual earnings. Income you didn’t pay Social Security taxes on doesn’t affect your future benefits.
2. Negotiate a raise or find a better-paying job
Increasing your income today will boost your future Social Security benefits, provided you’re earning less than the taxable wage base for the year. One of the most effective strategies for boosting your income is to negotiate a raise with your current employer. A higher salary would give you more spending money today, as well as increase your future benefit checks.
When that’s not an option, consider seeking out a better-paying position elsewhere, if you can find one. But there’s more than just your future Social Security benefits to think about when considering a job change. Remember to weigh what the new position entails, what benefits it comes with, and what kind of schedule you’d have to keep before deciding whether it’s right for you.
3. Start a side hustle
A side hustle is a great way to boost your income if you’re unable to find a better-paying job or you don’t want to leave your current employer. Many side hustles these days are flexible, so you can fit them in around your regular job and other responsibilities as needed.
Explore a few side hustles to see what makes the most sense to you. Remember to weigh any costs associated with the job to decide whether the profits feel worth it to you.
