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To get the most benefit from your Social Security retirement benefit requires careful planning and smart decisions both in the beginning and later in your career. Although it may appear to be a distant dream for those in their twenties, the choices you make now will help you achieve more financial security in the future. From my experience, every penny is important, which is why it's worth knowing every possible route towards a greater monthly income.
How Working Longer Can Pay Off
Many young professionals are unaware that their Social Security benefit doesn't depend only on the time you retire — it's also about how long you work. The system calculates your benefits by considering your highest earning years. If you don't make it to the 35-year mark, the zero years reduce the amount you earn. Even after you reach 35 years, higher earnings at the end of your career can replace lower-income years, thereby raising your average. This extra effort impacts your savings: more savings, delayed withdrawals, and the possibility of a larger amount of future payments.
Earn More, Buy More Security
The next lever is clear — earn more. Social Security taxes your earnings up to a limit per year, set at $168,600 in 2024 and expected to rise in the years to come. Paying taxes at the maximum means that you're contributing to the system in order to reap the maximum benefit. It's true that not everyone makes the same amount, but every extra dollar that is subject to Social Security helps.
Keep Working in Retirement
In the years after retirement, earnings can still increase your benefit. It's a good thing when you decide to take an occasional job or a part-time job.
"Additional work in your later years can sometimes push out low-earning years from your 35-year calculation, raising your averaged benefit."
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Delay Your Claim for a Bigger Check
The reward for patience is patience with Social Security. Claiming as early as age 62 will reduce your monthly benefit, but waiting until age 70 is the best way to get the highest amount. For each year you delay past your full retirement date (which is currently 67 for most people), your monthly payment increases by 8.8%. Imagine the difference: waiting just three years can mean receiving 124% of your normal benefit.
Leverage Your Marital Status
Divorce, marriage, widowhood — all provide specific strategies. Benefits for survivors or spousal benefits can increase income, particularly for couples. For divorced people, it's possible to claim benefits based on the record of an ex-spouse. Every situation has its own rules, and scenario modeling can be crucial.
Expert Advice: Worth the Investment
With over 500 ways to claim, a financial advisor with Social Security experience can be a huge help. Making sense of complex scenarios or maximizing survivor benefits requires expert advice. It's surprising how many Americans miss out on the most effective strategies, leaving a lot of money unclaimed. Engaging a professional to help you is a smart choice, and often pays off.
Pause, Then Restart: Suspending Your Benefit
If you took benefits too early but later regret it, there's a chance. When you reach full retirement age you can stop receiving your benefits and earn delayed credits at the rate of 8% until you re-enter the workforce (or reach age 70). As with other do-overs, there is no requirement to repay previous payments, but other beneficiaries like minor children or spouses could be affected.
Altogether, these six steps show that a combination of perseverance, smart timing, and expert advice can significantly increase your payments in the future. Even when you're nearing retirement, understanding how to increase your Social Security benefits is one of the best financial decisions you can make. The higher your monthly check, the more pleasant and secure your life can be.
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