The average senior raked in $1,665 a month from Social Security in March 2022, but there are plenty who did much better. The maximum Social Security benefit this year is $4,194 per month. But to achieve this, you need a very high income throughout your working years. Fortunately, there are ways to increase your checks that don’t involve a six-figure salary. Here are three that everyone should consider.
1. Work at least 35 years
The Social Security Administration bases your benefit on your average monthly income over your 35 highest-earning years, adjusted for inflation. This is known as your average indexed monthly earnings (AIME). Those who don’t work at least 35 years have some zero-income years factored into their calculation, and even one of these can reduce your benefit.
For example, if you earned $50,000, adjusted for inflation, every year for 35 years, your AIME would be $4,167. The government then plugs this into a formula to determine your monthly benefit amount. If you were turning 62 in 2022, you’d get $1,927 per month from the program with an AIME of $4,167.
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But if you only worked for 34 years, your AIME would drop from $4,167 to $4,047, and your monthly benefit amount would drop from $1,927 to $1,889. That’s a difference of $38 per month. It might not seem like much, but over time, it adds up. If you claim Social Security for 20 years, that’s a difference of over $9,100.
That’s why it’s best to work at least 35 years whenever possible and longer if you can. Most people earn more later in their careers than they did when they were young. Continuing to work past the 35-year mark often increases your Social Security checks because these later, higher-earning years eventually replace your earlier, lower-earning years in your benefit calculation.
2. Verify the accuracy of your earnings record
The government keeps track of how much money you’ve paid Social Security taxes on over the years in your earnings record. You can view this by creating a My Social Security account. When you first set up your account, you’ll need to answer some identity verification questions. But once that’s done, you’ll just be able to log in with your username and password.
It’s a good idea to check your earnings record at least once per year to verify that the income shown here matches your own records. Most of the time, it’s correct because its information comes right from the IRS. But if you made a mistake on your tax paperwork, like transposing a digit in your Social Security number or failed to notify your employer of a name change, you could see some errors. This could lead to a smaller Social Security benefit than you deserve.
You should notify the Social Security Administration of any discrepancies right away by completing a Request for Correction of Earnings Record form and submitting it, along with copies of your own records that show how much you actually earned during the year.
There is an exception for high earners. You don’t pay Social Security taxes on all of your income. In 2022, you only owe taxes on the first $147,000 you make, and in prior years, this limit was lower. If you earned more than this, your earnings record may correctly show a number that’s different from your actual income for the year. Double-check the maximum income subject to Social Security tax for the year in question before reporting it as an error to the Social Security Administration.
3. Delay benefits if it makes sense for you
You can claim Social Security as early as 62, but you need to wait until your full retirement age (FRA) to get the amount you’re entitled to based on your work history. This is anywhere from 66 to 67, depending on your birth year.
Every month you claim benefits under your FRA shrinks your checks. Those with an FRA of 66 get 75% of their full benefit per check at 62, while those with an FRA of 67 only get 70% of their full benefit per check when they claim right away.
Delaying benefits grows your checks a little at a time until you reach 70 and qualify for your maximum benefit. That’s 124% of your full benefit per check if your FRA is 67 or 132% if your FRA is 66.
Those who expect to live into their 80s or beyond will probably get the most out of the program by delaying benefits. But those with shorter life expectancies or little to no savings may have to start earlier.
There’s a calculator in your My Social Security account that can help you figure out how much you’ll get from the program at various starting ages. Use this to help you decide when you’d like to sign up for benefits.
The three tips above aren’t the only ways you can increase your Social Security benefit, but if you do all three, you should have a good chance of beating the average $1,665 monthly check. Those who really want to squeeze the most out of the program should look for ways to increase their income as well. Even a small raise today could lead to significantly larger checks in retirement.
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