3 Surprisingly Simple Ways to Increase Your Social Security Benefits

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You’re likely to rely on Social Security to some extent during retirement. While it may not be your primary source of income (especially if you have accumulated a sizable nest egg), those benefits are likely to come in handy. And if you take these simple steps, you could end up with a higher monthly benefit for the remainder of your years.

 

1. Extend your career if you’ve reached the pinnacle of your earnings

The monthly Social Security benefit to which you are entitled during retirement is determined by your earnings during your 35 most productive years in the workforce. Now, later in your career, you may reach a point where your salary is higher than it has ever been. And if that is the case, extending your career a little further may result in increased Social Security income.

Consider that your lowest year of earnings within your top 35 was $50,000, and you are now earning $120,000 and on the verge of retirement. If you worked an additional year, you would add another year of significantly higher earnings to your benefit calculation, resulting in increased Social Security benefits when you retire.

 

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2. Defer filing until you reach full retirement age.

Once you reach full retirement age, or FRA, you are entitled to your monthly Social Security benefit based on your income history. It is either 66, 66 and a specified number of months, or 67 years old. It is determined by the year of your birth.

Each month you delay filing for Social Security beyond FRA increases your benefit by a small amount. Additionally, for each year you delay filing, your benefit increases by 8%.

Once you reach the age of 70, you can no longer increase your Social Security benefit, so delaying your claim beyond that point will only result in you potentially losing out on benefits you are eligible for. However, if you can wait until your 70th birthday to claim Social Security, you may be eligible for a much larger benefit for many years to come.

 

3. File a spousal benefit claim if your partner earned more than you did.

It is possible that you worked and are eligible for Social Security benefits based on your wage history, but were not a high earner. If that is the case, but your spouse earns more, you may be in luck.

Married individuals have the option of claiming Social Security spousal benefits, and if they do so before FRA, they will be entitled to half of the benefit their spouse receives. As an example, suppose your own benefit pays you $1,200 per month but your spouse is entitled to $2,800 per month. You can increase your monthly Social Security income by $200 if you claim a spousal benefit.

To be clear, you cannot collect both your own Social Security benefit and a spousal benefit concurrently; you must choose between the two. However, you may unquestionably claim the greater of the two.

 

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Regardless of how significant a role Social Security plays in your retirement, it pays to maximize your benefits. These changes may result in an increased monthly benefit – and greater financial independence during your senior years.

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