3 Social Security Secrets to Even Bigger Checks | Smart Switch: Personal Finance

(Maurie Backman)

There’s a reason seniors are often advised not to rely too heavily on Social Security in retirement. Those benefits will replace about 40% of your pre-retirement wages if you have average earnings. But most seniors need about twice that income to live comfortably, which means Social Security alone isn’t enough.

That said, there are steps you can take to get more money out of Social Security. Here are some strategies you can employ to enjoy bigger checks for the rest of your life.

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1. Extend your career once your earnings peak

Social Security does not pay the same monthly benefit to all seniors. Rather, the amount of money you’re entitled to will depend on how much you earn during your highest-paid 35 years in the workforce.

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If you don’t have a full 35 years of work under your belt, it might pay to extend your career. For each year within the top 35 in which there is no earnings history on record for you, you will have $0 in your benefit calculation.

But even if you make You have a 35-year work history, it could still be profitable to extend your career once you reach your maximum earnings. That way, you can replace a few years of lower income with higher income, thereby increasing your benefit.

2. Wait until age 70 to apply

You are entitled to your full monthly benefit based on your earnings history once you reach full retirement age (FRA). FRA depends on your year of birth, and is 66, 67, or somewhere in between (ie 66 and a specific number of months).

But for every month you delay filing after the FRA, your benefit gets a little boost. Waiting a couple of months won’t make much of a difference, but waiting a couple of years might.

In fact, you can earn delayed retirement credits for waiting to claim benefits until age 70. And for every full year you delay filing, your benefit increases 8%. If your FRA is 67 and you wait until age 70 to enroll in Social Security, you’ll see a 24% increase for the rest of your life.

3. Increase your income with a second job

It’s a big mistake to think that only salaried wages count for Social Security. If you work in any type of additional work that you pay taxes on, whether it’s driving for a transportation service, walking dogs, or telemarketing, that income counts toward your future benefit. So if you can’t get consistent raises at your main job, it’s worth considering taking a side job.

By the way, keeping a second job could make it easier to free up cash for retirement savings purposes. And while it’s clear that you can take steps to increase your Social Security income, even with a higher monthly benefit, it’s worth bringing as much money into retirement as possible.

don’t settle for less

Social Security could end up being a major source of income once you retire. If you’re willing to make some sacrifices, with careful planning, you can set yourself up for a higher profit and enjoy the financial freedom that comes with it.

The $18,984 Social Security Bonus Most Retirees Completely Overlook

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