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Social Security: 4 Simple Ways to Boost Your Benefits

Source: Social Security Administration.

Social Security is one of the most important sources of income for retired Americans, with a disturbingly large number of retirees relying on what they receive from Social Security for the bulk of their living expenses. With almost half of unmarried retirees getting 90% or more of their income from Social Security, it's important for you to take whatever steps you can to make your benefit as big as possible.

The best time to work on improving your Social Security situation is before you retire, as that gives you maximum flexibility to consider all of your retirement options. But even if you've already retired, there are still a few things you can do to ensure Social Security pays you as much as you deserve. Let's look at four simple ways you can boost your benefits.

1. Max out your Social Security work history

The process that Social Security uses to calculate your benefit amount can be complicated for many to understand, but the general idea behind the calculation is quite simple. Social Security looks at your work history and takes the 35 top-earning years, making adjustments to reflect the impact of wage inflation on your actual pay throughout your career. It then takes the average of those top-earning years, runs the average through a formula, and determines your benefit. The higher the average, the more you'll receive.

If you've worked less than 35 years, then one easy way to boost your Social Security benefit is to fill in those blank years and work long enough to max out the earnings that Social Security considers. Even modest earnings will have a positive impact in that situation. If you've already had a 35-year career, then the question is whether you can earn more now than you did in your lowest-earning year -- again making sure you adjust for inflation. If the answer is yes, then staying in your job can lead to higher benefit payments down the road.

2. Consider not taking early benefits if you're still working

You're allowed to start taking Social Security benefits as early as age 62. For many, the prospect of collecting Social Security to supplement the income they earn at work is enticing, but the rules governing the program start to take away your benefits if you earn more than a certain amount from work.

Specifically, if you haven't reached full retirement age of 66, then for every $2 you earn above $15,480 this year, Social Security will take away $1 of your annual benefits. Earn enough, and you can end up losing every penny of what you receive from Social Security. And while that money isn't gone for good -- Social Security gives you credit for what it took away and raises benefit amounts in later years -- it often makes more sense just to put off Social Security benefits if you work and earn a decent salary.

3. Wait beyond minimum retirement age to claim benefits -- if you think you'll live long enough

The easiest guaranteed way to raise your monthly Social Security payment is to wait beyond age 62 to collect benefits. The longer you wait, the higher your payment goes -- as much as 8% per year higher as you approach age 70.

Source: Social Security Administration.

The trade-off, of course, is that by waiting to collect benefits, you'll receive them for fewer years during your lifetime. If you take payments later, it can take years to catch up and pass what you would have gotten by claiming benefits early. It's therefore important to consider your financial needs and your life expectancy in making the best decision for you and your family.

4. Make the most of your family situation

Social Security isn't just about you. Spouses and minor children can also earn benefits based on your work history during your lifetime, and survivors are entitled to benefits after your death. Being smart about when and how you claim Social Security has an impact on them as well.

Source: Social Security Administration.

For instance, under certain circumstances, married couples can set things up so that one spouse collects spousal benefits even as the other's benefit amount continues to grow. Yet without following the right steps, couples can miss out on those payments. A number of similar strategies can boost your family's total take from Social Security, but only if they're implemented correctly.

Social Security is a complicated program, but it's also essential for millions of Americans. Doing what you can to boost your benefits will make sure you get the most from the work you've done throughout your career.

How to get even more income during retirement
Social Security plays a key role in your financial security, but it's not the only way to boost your retirement income. In our brand-new free report, our retirement experts give their insight on a simple strategy to take advantage of a little-known IRS rule that can help ensure a more comfortable retirement for you and your family. Click here to get your copy today.

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 17, 2014, at 11:51 AM, biglarz75 wrote:

    But what can you do if you're disabled before retirement age and therefore don't get full benefits or won't be able to receive full benefits for this reason , and you're under 60yrs old and your spouse takes care of you and they don't receive any benefits because they're under 62yrs old ,what can you do when both of you have to live on that one income" it's hard to do , you try to live with what you have but don't want to live in a shack or eat unhealthy , what's there to do

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Dan Caplinger

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

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