As many Americans approach retirement, those living on fixed incomes many wonder how to make their Social Security benefits as big as possible. Well, the good news is that there are strategies to do this. Some of the key things to look into is, the number of years you work, the amount you earn and when you should begin collecting benefits.
As a beneficiary, you worked long and hard to pay into the Social Security system therefore it’s important that you get the maximum out of your benefits. Be smart and strategic about how and when you claim.
Why Your Work History Is So Important
The number of years that you work is extremely important. Social Security calculates your benefits on your highest earning for 35 years. This simply means that if you have lesser than 35 years, Social Security will fill the missing years with zeros and unfortunately, the zeros can reduce your benefits.
If you happen to have a few years before retiring, it can be worthwhile to continue working to replace the zeros with actual earnings.
Work, even part-time, may have a significant impact. Each additional year of employment adds to your record and may result in higher future compensation.
Requesting an increase
It may not be as easy as it sounds, but you have been a hard worker and put in more hours than normal, ask your employer for a raise especially if you haven’t gotten one in a while. This will help in increasing your lifetime earnings.
The Reward for Waiting: Bigger Payments
The statement of patience is virtue is actually true. The age at which you start claiming Social Security benefits also plays a role in how much benefits you receive. Yes, it is possible to start collecting benefits from the age of 62, but unfortunately your payments will be reduced. In addition to this, if you wait until Full Retirement Age (FRA), you will be able to receive your full benefit amount.
But here’s where patience really pays off: if you delay taking your benefits beyond your full retirement age, your payments grow by 8% for every year you wait, up until age 70.
After age 70, there’s no extra reward for waiting, so that’s the best point to start collecting if you can afford to wait.
Steps to Take Now
Here are a few simple things you can do to make sure you’re on track for the biggest possible check:
- Beneficiaries can log onto their Social Security online account to view their earnings record and ensure that all the information is correct.
- Where possible, try to work a little longer to increase your average.
- Beneficiaries who are able to wait until FRA, or even age 70 must do so as this will ensure you receive the maximum out of your benefits.
- If you require assistance in making these decisions, consult with a financial advisor to help you.
Why It Matters
There are millions of Americans who rely on Social Security as a vital source if income. In a time where the price of goods and services is constantly increasing, every little bit of extra income counts to cover necessary bills.
The Bottom Line
Receiving the maximum out of your Social Security requires planning and strategic decision making. Beneficiaries are urged to plan carefully and make wise decisions regarding claiming their Social Security benefits. Where possible, work a little longer and try and claim benefits a little later.
The end goal is a peaceful retirement, and you deserve to enjoy the benefits of your hard work over the years.
Be sure to seek assistance if you require so that you are able to make wise decisions to secure your financial future.