Storyteller and entertainer Garrison Keillor is famous for her stories about Lake Wobegon “where all women are strong, all men are beautiful, and all children are above average.” Most of us like to think that we are above average in many ways – our looks, our driving, our IQ and more.
We can not change some things about ourselves, such as our IQs, to be above average, but other things we can – and here is an important example: Social benefits. The average monthly pension benefit from social security was recently only $ 1,661 per month, or about $ 20,000 annually.
Fortunately, there are some things you can do that can do your benefits more than that. Here are three.
Delay in starting to claim your benefits
First, you can delay the start of charging your benefits. Each of us has a “full retirement age“(OFF), which is 66 or 67 or somewhere in between for most of us. That’s the age when we can start receiving full benefits to which we are entitled, based on our earnings. However, we can start collecting as early as age 62 and as late as age 70.
Start collecting early and your checks will be smaller, but you will receive many more of them, making an early start not as awful as it might seem. For those in poor health or with a shorter life expectancy – or simply those who need more income as soon as possible – it may make good sense to start collecting early.
If you have a decent chance of living a longer-than-average life, and you can delay starting to collect your benefits, they will increase by about 8% for each year beyond your full retirement age – up to 70 years. delay from 67 to 70 years can make these checks 24% bigger.
Earn more while working
Next, try to earn more. This $ 1,661 benefit is for those with average earnings. You only need to have earned more than 50% of the recipients to receive a larger check than that.
So think of ways to earn more. You can take on a side congestion for a few years – or for many years. Nor does it have to be a move. You can drive and deliver meals from restaurants to those who have ordered them online, or you can provide guitar lessons to local children (provided you know how to play the guitar). Performing freelance work that you find on online freelance marketplaces is another option, as is making and selling crafts online.
Then there is your primary job. Ask for a pay rise at least every few years. (And for best results, earn one.) If that does not work, or if you do not love your current job, look for another that pays better. You can even earn an extra credential or degree to qualify for a better or completely different kind of job or career.
Finally work longer. The formula that determines your Social Security benefits are the average of your earnings in the 35 years you earned the most (of course adjusted for inflation). So if you have only worked for 30 years when you stop working, the calculation will include five zeros. Try to work for at least 35 years.
Even better, after working for 35 years, if you earn much more than you have earned before (again, on an inflation-adjusted basis), consider working a few more years because each year of high earnings will kick your lowest earning year out of the calculation.
These are some of the many effective ones ways to increase your social benefits. Take a closer look at which ones make the most sense to you, because a fatter check that comes every month (and even gets adjusted for inflation) will make your retirement years so much safer.