Social Security serves as a crucial source of income for many retirees. However, the average Social Security check of about $2,000 may not be sufficient for most retirees to cover all their retirement expenses. Therefore, it is essential to have strategies that can be used to increase Social Security benefits, so that you don’t settle for $2,000 a month. Here are three tips to beat the average Social Security check.
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Work for At Least 35 Years
The amount of Social Security benefit you get depends on your highest-earning 35 years of work. If you worked fewer than 35 years, the Social Security Administration (SSA) replaces the missing years with $0 when calculating the average earned, thus lowering your benefit amount.
Therefore, it is essential to work for 35 years or more and, if possible, ensure that you earn higher wages as you progress in your career. If you are almost retiring and have gaps in your employment, consider working part-time to fill those years and boost your earnings record.
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Maximize Your Earnings
Besides working for more than 35 years, it is important to earn more since the SSA calculates your benefits based on your average indexed monthly earnings. Unfortunately, many people reduce their working hours or take part-time jobs in their 60s, which at times impacts their Social Security benefits negatively.
Therefore, it is important to maximize your earnings as much as possible until your full retirement. However, note that once you reach the earnings cap, which is $176,000 for 2025, any income beyond that doesn’t count towards your benefits.
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Delay Your Claim
Delaying when to claim your Social Security benefits is one of the most effective ways to increase your Social Security benefits. Although you can claim as early as age 62, doing so lowers the amount of benefits you receive.
For maximum benefits, it is advisable to delay your claim until age 70. For every year you delay taking your Social Security benefits past full retirement age (FRA), your benefits get a bump of 8% until age 70. For example, I you were eligible for $2,000 per month at age 66, waiting until age 70 increases your benefit to about $2,640. This increase can boost your monthly check significantly and improve your quality of life.
Other Ways of Boosting Your Social Security Check
Besides the three strategies, you can maximize your Social Security check and beat the average Social Security check by minimizing taxes on your Social Security benefits. Depending on your overall income, between 50% and 80% of your benefits may be subject to federal income tax.
Therefore, while you receive income from other sources such as IRAs and 401(K) s, consider spreading your income strategically in retirement to lower your taxable income.
Additionally, while Social Security is important in retirement, it is crucial to have other sources of income, such as personal savings, to further enhance your financial security. Having more than one source of income gives you more flexibility and reduces over reliance on Social Security alone, which is risky.
Conclusion
Maximizing your Social Security check is key to ensuring a comfortable retirement. The strategies discussed above can enable you to increase the amount you receive from Social Security each month, and also have other sources of income.
Additionally, with careful planning, you can enjoy a more financially secure retirement and avoid relying on the average $2,000 monthly check. So, take advantage of the above strategies, and seek financial advice when planning for retirement, and your future self will thank you.