Social benefits can be a lifeline for many retirees. In fact, about 37% of men and 42% of women rely on their monthly checks for at least half of their retirement income, according to the Social Security Administration.
If you expect social security benefits to be a significant source of your income, it is wise to make sure you get the most out of them. Fortunately, your benefit amount is not set in stone and there are a few ways you can increase your payments by hundreds of dollars a month.
Work a few more years
Although working longer may not be the most appealing option for those who want to get a kickstart on retirementStaying in the workforce for at least a few more years can have a significant effect on your benefit amount.
The Social Security Administration calculates your basic benefit amount by taking an average of your earnings over the 35 highest earning years of your career and then adjusting it for inflation.
If you have not worked 35 full years at the time you apply for Social Security, you will have zeros added to your earnings average to account for the time you did not work. This will lower your average and result in a smaller amount of benefit.
Even if you have worked for at least 35 years, it can sometimes still pay to work a few more years. Your annual salary is probably higher now than it was earlier in your career. Because the Social Security Administration only counts your highest earning years, working a few more years now, when your salary is higher, can result in a higher average – and a larger amount of benefits.
2. Delay services
One of the biggest factors that affects the size of your checks is the age you apply for Social Security. You can start claiming as early as you are 62 years old, but by postponing the application until after that age, you will receive more each month.
If you delay the benefits by even a few years, it can have a big effect on your monthly income. Say yours, for example full retirement age (or the age at which you receive the full benefit amount to which you are entitled) is 67 years. Let’s also say that by claiming that age, you will receive $ 1,500 a month from Social Security.
If you were to claim 62, your checks would be reduced by 30%, giving you $ 1,050 a month. On the other hand, if you were to defer benefits until the age of 70, you would receive your full $ 1,500 per year. month plus a 24% bonus, or $ 1,860 per month. month.
3. Claim all the benefits you are entitled to
While most older adults are eligible for retirement benefits, you may also be eligible for other forms of social security – such as spouse benefits or divorce benefits.
If you are currently married to someone who is eligible for Social Security, you may be eligible spousal benefits – even if you have never worked.
The maximum you can receive is 50% of the amount your spouse will charge at his or her full retirement age. However, if you earn benefits based on your own work record, you will only receive the higher of the two amounts – not both.
Divorce benefits are similar, except that you charge benefits based on the work of a former spouse. To be eligible for divorce, your previous marriage must have lasted for at least 10 years, and you are currently unable to be married. However, if your ex-spouse has remarried, it will not affect your ability to claim divorce benefits on his or her record.
Social benefits can be a great source of income when you retire, so it is wise to make sure you maximize them. Any of these strategies can increase your benefits significantly, and by taking advantage of them you can create a more financially secure pension.