Social Security serves as a key source of income for millions of retirees, and countless seniors depend on those payments to cover their basic needs. If you want to get the most out of your benefits, here are a few key moves to make during your working years.
1. Hold off on filing
The amount you collect in Social Security is based on how much you earn during your career. That said, you have the ability to raise or lower that figure depending on the age at which you first file for benefits. If you claim benefits at what's known as full retirement age, you'll get the precise amount you're entitled to based on your earnings history. But if you hold off on accessing those benefits, you'll have an opportunity to increase them.
IMAGE SOURCE: GETTY IMAGES.
Your full retirement age is based on the year you were born. Here's what it looks like for today's workers:
Year of Birth
Full Retirement Age
66 and 2 months
66 and 4 months
66 and 6 months
66 and 8 months
66 and 10 months
DATA SOURCE: SOCIAL SECURITY ADMINISTRATION.
Now, imagine that based on your earnings record, you're entitled to $1,500 a month if you file at your full retirement age of 66. While you could take the money at that point, if you hold off a bit longer, you'll get an 8% boost for each year you wait. And while 70 is the latest age to accumulate delayed retirement credits that increase your benefits, in our example, you'd raise your monthly payments from $1,500 to $1,980 by waiting the maximum amount of time.
Of course, not everyone can afford to delay Social Security. Some folks, in fact, have no choice but to file early, thus reducing their benefits. But if you have another source of income, whether it's job-related or otherwise, it pays to hold off as long as you can.
2. Report errors on your earnings record
Your Social Security benefits are calculated based on your top 35 years of earnings. So if the Social Security Administration (SSA) has any of that data wrong, it could work against you. For example, if you have a given year in which you earned $90,000, but for some reason your income is listed as $60,000, that could drive down your benefits. Similarly, if the SSA is missing any years of earnings, your benefits will take a hit if you don't correct the problem.
Now if you're under 60, you'll no longer automatically get a copy of your earnings record mailed to you each year. Rather, you'll need to create an account on the SSA website to access that data. If you spot an error, you may need to provide old W-2s or paystubs to make your case, but the sooner you get on top of the problem, the more time you'll have to resolve whatever issues might lurk.
3. Work longer than planned
Working longer can boost your retirement benefits in a number of ways. For one thing, if you didn't work for a full 35 years (say, you took time off to raise children or care for a loved one who fell ill), rather than retire at the age you were initially planning on, push yourself to put in an extra year or two. Doing so will replace some years of $0 earnings with an actual income, which, in turn, will raise your benefits.
Additionally, it's often the case that as we progress in our careers, we begin earning more money. If your salary is higher today than it was during any of the 35 years that would otherwise get factored into your benefits calculation, then it pays to swap a year or two of lower earnings for higher earnings.
Given that Americans are living longer these days, you might end up collecting Social Security income for 30 years or more. If you're looking to get the maximum amount of benefits, keep reading up on Social Security so that you're able to develop your own strategy for doing so.
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