Millions of seniors today receive monthly benefits from Social Security. And many retirees rely heavily on those benefits to pay the bills.
You may be eager to squeeze as much money as you can out of Social Security. And to do that, it might help to follow these little-known tips.
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1. Check your earnings record for errors
The monthly benefit you receive from Social Security as a retiree will hinge on your personal wage history. But underreported income could result in a smaller monthly benefit down the line.
That’s why it’s so important to know what income the Social Security Administration (SSA) has for you on record. And there’s an easy way to get at that information. Simply create an account on the SSA’s website and check your earnings statement every year.
That statement actually contains two vital pieces of information — your reported earnings for the year, and also, an estimate of your future monthly benefit. If you see a lower income recorded by the SSA than what you actually earned, you’ll have an opportunity to work with the agency to get those details corrected.
2. Keep working later in life
Many people retire at a time when their salaries are at their highest in their lifetime. But if you’re able to keep working a bit longer once your earnings have peaked, it could result in a higher monthly benefit from Social Security.
Your monthly retirement benefit is calculated based on your 35 highest-paid years in the labor force. If you’re earning more at age 65 than you’ve ever earned before, instead of continuing to bring home that salary for just one more year, try working for two or three more years. In doing so, you’ll replace some years of lower wages with higher ones in your personal Social Security calculation.
3. Undo an early filing
Your monthly Social Security benefit is yours to enjoy in full once you reach full retirement age (FRA), which is either 66, 67, or somewhere in the middle, depending on your year of birth. You can sign up for Social Security ahead of FRA, since you’re allowed to claim benefits starting at age 62. But for each month you file ahead of FRA, your monthly benefit gets reduced on a permanent basis.
You may have already claimed Social Security early for a reason that made sense to you at the time. But if you now regret shrinking your monthly benefit, there’s good news.
If you’re within a year of your filing, you can actually withdraw your benefits application, repay all of the money you received to the SSA, and then file for Social Security again at a later point in time. That gives you an opportunity to lock in a higher monthly check.
Sometimes, eking more money out of Social Security boils down to knowing the program’s rules. If your goal is to get as high as benefit as you can, check your earnings record every year, push yourself to keep working once your income peaks, and take advantage of Social Security’s do-over option if you filed early.
