4 ways to increase your Social Security benefit

When it comes to Social Security, every dollar counts. Whether you’re nearing retirement or just starting to plan for it, understanding how to maximize your benefits is crucial. Here are four straightforward strategies to help you boost your Social Security benefit, ensuring you get the most out of the system you’ve paid into for years.

1. Work longer to boost your benefit

One of the most effective ways to increase your Social Security benefit is to work longer. Here’s why:

• Social Security benefits are calculated on your highest 35 years of earnings: If you haven’t worked for 35 years, those missing years are counted as zeros in your benefit calculation. By working longer, you replace those zero years with years of higher earnings, potentially increasing your benefit significantly.
• Earnings after full retirement age can increase your benefit: Even after reaching your full retirement age (which varies depending on your birth year), continuing to work and earn a salary can increase your benefit. Social Security recalculates your benefit annually based on your latest earnings, so higher earnings in your later years can still bump up your monthly check.

2. Delay taking your benefits

Patience can truly pay off when it comes to Social Security. Here’s how delaying your benefits can increase the amount you receive:

• Full retirement age vs. early retirement: You can start claiming Social Security benefits as early as age 62, but doing so will permanently reduce your monthly benefit. For example, if your full retirement age is 67 and you claim at 62, your benefit could be reduced by up to 30%. On the other hand, waiting until your full retirement age (67 for most people) ensures you receive 100% of your benefit.
• Delayed retirement credits: If you delay receiving your benefits beyond your full retirement age, you earn delayed retirement credits, which increase your benefit by about 8% per year until you reach age 70. This means if you can afford to wait until 70, you could receive up to 32% more per month than if you claimed at full retirement age.

3. Maximize your spousal and survivor benefits

Understanding the rules around spousal and survivor benefits can also help you maximize your Social Security income:

• Spousal benefits: If you’re married, you might be eligible for spousal benefits based on your spouse’s earnings. This benefit can be as much as 50% of your spouse’s full retirement benefit. If your own benefit is lower than this amount, claiming the spousal benefit might be a better option.
• Survivor benefits: If your spouse passes away, you may be eligible for survivor benefits, which can be as much as 100% of your spouse’s benefit. If your spouse delayed claiming benefits and earned delayed retirement credits, the survivor benefit will be based on that higher amount. Timing is crucial here too—waiting until full retirement age to claim survivor benefits can maximize the amount you receive.

4. Coordinate benefits with your spouse

Planning together with your spouse is key to getting the most out of Social Security:

• Strategize your claiming ages: If both you and your spouse have worked, you each have your own Social Security benefit to claim. By coordinating when each of you claims benefits, you can maximize your household income. For example, one spouse might claim benefits early while the other delays, allowing the delayed benefits to grow.
• Consider the impact of one spouse’s death: Since the surviving spouse can switch to the higher benefit, it may make sense for the higher-earning spouse to delay claiming as long as possible. This ensures the surviving spouse receives the maximum benefit.

Final thoughts

Increasing your Social Security benefit doesn’t have to be complicated. By working a little longer, delaying when you start receiving benefits, understanding spousal and survivor benefits, and coordinating with your spouse, you can make sure you’re getting the most out of your Social Security. Remember, these decisions can have a lasting impact on your financial security in retirement, so take the time to plan and consult with a financial advisor if needed.

Taking these steps now can help ensure a more comfortable and financially secure retirement.