Chances are you’ll end up depending on Social Security to some degree during your retirement. It might not be your main source of income (especially if you manage to build up a nice nest egg), but these benefits are likely to come in handy. And if you do these simple things, you could end up with a higher monthly benefit that you can enjoy for the rest of your life.
1. Extend your career if your earnings have peaked
The monthly Social Security benefit you are entitled to during your retirement will depend on how your earnings looked during your most profitable 35 years in the labor market. Now you may reach a point later in your career where your salary is higher than it has ever been. And if so, extending your career a bit could lead to higher Social Security income.
Imagine your lowest earning year in your top 35 earning you a salary of $50,000, and you are now earning $120,000 and are about to retire. If you were to work an extra year, you would add another year of much higher earnings to your benefit calculation, resulting in more money from Social Security once retired.
2. Delay your deposit beyond full retirement age
You are entitled to your monthly Social Security benefits based on your earnings history once you reach full retirement age, or FRA. This age is either 66, 66 and a certain number of months, or 67 years. It depends on your date of birth.
For each month you delay filing for Social Security after FRA, your benefit is increased slightly. And for each year you delay your deposit, your benefit increases by 8%.
Once you hit age 70, you can no longer increase your Social Security benefits, so there’s no sense in delaying your application beyond that point, as it will only potentially hurt you. lose benefits You are eligible. But if you’re able to wait until your 70th birthday to apply for Social Security, you could get a much more generous benefit for many years to come.
3. Apply for spousal benefit if your partner had a higher income and you had a lower income
You might be working and eligible for a Social Security benefit based on your earnings history, but you weren’t a particularly high earner. If so, but you’re married to a higher income, you might be in luck.
Married people have the option of applying for spousal benefits from Social Security, and if you wait for the FRA to do so, you will be entitled to half of the benefit your spouse is receiving. So let’s say your own benefit will only pay you $1,200 per month, but your spouse is entitled to $2,800 per month. If you apply for a spousal benefit, you can increase your monthly Social Security income by $200.
To be clear, you cannot collect your own social security benefit. more a spousal benefit at the same time — it’s either one or the other. But you can absolutely claim the higher of the two.
No matter how important a role Social Security plays in your retirement, it pays to get as much out of it as possible. These moves could result in a higher monthly benefit and greater financial freedom in your senior years.
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