Imagine if you were able to transform a Social Security benefit into more than the nation's average? Many retirees are amazed to realize the amount of control they can exercise over their monthly retirement payouts. By gaining a better understanding of the system's fundamental rules and employing smart strategies, you will be able to increase every penny for a more comfortable, secure retirement. Keep reading for five effective ways to increase your monthly paycheck — the final one could surprise you!
Know the Average Social Security Check — and the Potential to Beat It
In 2024, the average monthly Social Security retirement benefit is estimated to be $1,900. However, this isn't the maximum amount. The highest payout for those who retire at the full retirement age is $3,822, which is more than double the average! Knowing where you stand among these numbers will help you set a higher bar and make better plans.
Work Longer to Boost Your Benefit
Did you know that your Social Security calculation is determined by the highest earnings for the last 35 years? If you are able to work a few extra years beyond what you originally planned, you could replace lower-earning years on your record with more lucrative ones. Working until or even past your full retirement age (currently 66 or 67 for most people) could increase your benefits substantially. According to SSA information, each additional year of work (at a higher income) could push your monthly pay up by many percent.
Delay Claiming for Maximum Payout
This method may require some patience — but it pays off. Claiming your Social Security as soon as you turn 62 can cut your monthly payment by a whopping 30 percent compared to waiting until full retirement age. If you delay it beyond age 70, you'll be able to earn delayed retirement credits which add an additional 8% each year until you reach full retirement age. This could result in benefits that are up to 76% more than the earliest option.
"Don't leave money on the table — the longer you wait (up to age 70), the bigger your monthly benefit grows."
Strategically Plan Spousal and Survivor Benefits
If you're widowed or married, do not overlook the benefits of spousal benefits. You could be eligible for as much as 50 percent of your spouse's total benefit, and in certain circumstances, switching between your own and your spouse's records can increase the payouts. Widows and widowers need to be aware of when they should file for survivor benefits, as they could be greater than those you get from your own. A little planning could increase your income by hundreds of dollars each month over the course of years.
Keep an Eye on Taxes and Earnings Limits
One thing that could make your life difficult: If you take Social Security prior to full retirement age and continue working, you'll have to meet income limits that will reduce your benefit in the event you exceed the limits ($22,320 in 2024). If your total income exceeds certain thresholds, up to 85 percent of your Social Security may be taxed. Knowing these numbers and understanding when to work and withdraw is essential to protect more of the money you earn.
The Five Best Ways to Beat the Average Check
- Work for at least 35 years — make sure your highest-earning years count towards your record
- Delay taking Social Security — every year after retirement age promises better returns
- Plan around spousal and survivor benefits to maximize family income
- Avoid reductions in benefits by understanding earnings limits if you work after you claim
- Be aware of taxes on Social Security by managing your total income
Looking for a larger Social Security payoff requires more than just luck. Whether retirement is near or not yet, making the right decisions now will pay dividends for the rest of your life. Not only does this alleviate financial stress, but it can also open the way to a more satisfying and peaceful future.
Personally, I'm always amazed by how small changes in strategy — like working an extra year or delaying my claim for 12 months — can alter my entire retirement plan. Planning for retirement is much more secure when I've got several of these techniques in my toolbox. If you're looking for how you can boost the amount of your Social Security check, these steps could be just what you need for a better retirement!
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