With Social Security facing financial challenges and its future uncertain, it’s easy to feel anxious about how much you’ll actually receive in retirement.
While you can’t control how the system itself is calculated or changes over time, you can take proactive steps to ensure you’re getting the most out of the program. Here are three essential strategies to boost your Social Security benefits.
1. Work at Least 35 Years
Social Security calculates your benefit amount based on your highest 35 years of earnings, adjusted for inflation. This means that if you want to maximize your monthly check, you need to work for at least 35 years.
Why 35 years? Because the Social Security Administration (SSA) uses this time frame to compute your Average Indexed Monthly Earnings (AIME), the foundation of your Social Security payment.
If you work fewer than 35 years, the SSA fills in the missing years with zero-income years, significantly lowering your average monthly earnings. For instance, if someone earned an average of $50,000 per year for 35 years, their AIME would be $4,167 per month. But if they worked only 34 years, their AIME would drop to $4,048 due to that one zero-income year.
By staying in the workforce for the full 35 years, you avoid reducing your AIME and ensure that your benefit calculation reflects your highest earnings.
2. Time Your Social Security Application Carefully
The age at which you decide to apply for Social Security can have a huge impact on the size of your monthly checks. The Full Retirement Age (FRA) is between 66 and 67 for most current workers, depending on your birth year. This is the age at which you qualify for your full benefit amount.
However, you can start receiving benefits as early as 62, though your benefit will be reduced by up to 30% if you apply before your FRA.
Conversely, if you delay claiming benefits past your FRA, your benefit increases by 8% per year until you reach age 70. This can result in a maximum increase of 32% over your full retirement benefit.
Delaying Social Security seems like a good deal, but it’s not always the best choice for everyone. If you’re in poor health or have a shorter life expectancy, delaying benefits could mean receiving fewer total checks over your lifetime.
To determine the right claiming age for you, it’s a good idea to use the my Social Security benefit estimator tool, which allows you to see your potential benefit at different ages. Consider your financial situation, health, and how long you expect to live when making this decision.
3. Coordinate With Your Spouse
If you’re married, your Social Security strategy becomes a bit more complex. Both you and your spouse will need to consider your individual benefits, as well as the spousal benefit, which is worth up to 50% of your spouse’s benefit at their FRA.
The SSA will automatically pay you the higher of your own retirement benefit or your spousal benefit, but there’s a catch: you can’t claim the spousal benefit until your partner starts receiving their Social Security checks.
For couples who have earned similar amounts throughout their careers, it often makes sense for both individuals to delay benefits as long as possible (up to age 70) to maximize the monthly payments.
However, if one spouse has earned significantly more than the other, a common strategy is for the lower earner to claim early while the higher earner delays their claim. This allows the couple to have some income while increasing the higher earner’s future checks.
When one spouse delays, the lower earner may switch to the spousal benefit later if it ends up being larger than their own retirement benefit.
Coordinating these strategies can maximize the total benefits a couple receives over their lifetime, but it requires planning and flexibility.
While you can’t control changes to the Social Security system, you do have the power to make strategic choices to increase your benefits.
Working at least 35 years, carefully timing your application, and coordinating with your spouse can all help maximize the income you’ll receive in retirement. Keep in mind that your strategy may evolve over time, especially as your financial circumstances and health change.
By planning ahead and using the tools available to you, like the my Social Security estimator, you can boost your Social Security benefits and create a more secure financial future.
FAQs
How does working for fewer than 35 years affect my Social Security?
The SSA adds zero-income years to make up the difference, which lowers your monthly benefit.
Can I delay claiming Social Security past age 70?
No, the latest you can delay is age 70, after which you won’t receive additional increases.
Should I apply for Social Security at 62?
It depends on your financial situation and life expectancy. Early application reduces your benefit by up to 30%.
What is the spousal benefit?
It’s up to 50% of your spouse’s Social Security benefit at their FRA, and you must wait until your spouse starts receiving benefits to claim it.
Can I switch from my own benefit to a spousal benefit later?
Yes, if your spousal benefit ends up being higher than your own, you can switch once your spouse begins collecting benefits.
