3 Ways to Boost Your Social Security by Hundreds of Dollars Per Month | Smart Change: Personal Finance


(Katee Brockman)

Social Security benefits can be a lifeline for many retirees. In fact, around 37% of men and 42% of women rely on their monthly checks for at least half of their income in retirement, according to the Social Security Administration.

If you expect Social Security benefits to make up a substantial source of your income, it’s wise to ensure you’re making the most of them. Fortunately, your benefit amount is not set in stone, and there are a few ways you could increase your payments by hundreds of dollars per month.

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1. Work a few more years

Although working longer may not be the most appealing option to those eager to get a jump-start on retirement, staying in the workforce for at least a few more years could have a significant effect on your benefit amount.

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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, then adjusting it for inflation.

If you haven’t worked 35 full years by the time you file for Social Security, you’ll have zeros added to your average earnings to account for the time you weren’t working. This will lower your average and result in a smaller benefit amount.

Even if you have worked at least 35 years, it sometimes pays to work a couple more years anyway. Your annual wages are likely higher now than they were 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 could result in a higher average — and a larger benefit amount.

2.Delay benefits

One of the biggest factors affecting the size of your checks is the age you file for Social Security. You can begin claiming as early as age 62, but by delaying filing until after that age, you’ll receive more each month.

Delaying benefits by even a few years could have a major effect on your monthly income. Say, for example, your full retirement age (or the age at which you’ll receive the full benefit amount you’re entitled to) is 67 years old. Let’s also say that by claiming at that age, you’ll receive $1,500 per month from Social Security.

If you were to claim at 62, your checks would be reduced by 30%, leaving you with $1,050 per month. On the other hand, if you were to delay benefits until age 70, you’d receive your full $1,500 per month plus a 24% bonus, or $1,860 per month.

3. Claim all the benefits you’re entitled to

While most older adults are eligible for retirement benefits, you could also be entitled to other types of Social Security — such as spousal benefits or divorce benefits.

If you’re currently married to someone who qualifies for Social Security, you could be eligible for spousal benefits — even if you’ve never worked.

The maximum you can receive is 50% of the amount your spouse will collect at his or her full retirement age. If you’re earning benefits based on your own work record, though, you’ll only receive the higher of the two amounts — not both.

Divorce benefits are similar, except you’re collecting benefits based on an ex-spouse’s work record. To qualify for divorce benefits, your previous marriage must have lasted for at least 10 years, and you cannot currently be married. However, if your ex-spouse has remarried, that will not affect your ability to claim divorce benefits on his or her ella record.

Social Security benefits could make up a large source of income in retirement, so it’s wise to make sure you’re maximizing them. Any one of these strategies could increase your benefits substantially, and by taking advantage of them, you can create a more financially secure retirement.

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