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3 Social Security Secrets for Even Bigger Checks

By Kailey Hagen - Jan 11, 2021 at 8:31AM

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These moves could net you hundreds of thousands of dollars extra over your lifetime.

The average Social Security benefit for retired workers is about $1,523 per month, and while that's not bad, you may be able to do a lot better. The secret to bigger checks lies in understanding how the Social Security Administration calculates your benefits. Leverage that knowledge by trying the three tips below so you can rake in the largest Social Security checks possible.

1. Work as long as you're able to

When calculating your benefits, the Social Security Administration looks at your income over your 35 highest-earning years. If you work fewer than 35 years, you can still qualify for Social Security as long as you've earned 40 credits. In 2021, one credit is defined as $1,470 in earnings, and you can earn a maximum of four credits per year. But if you work fewer than 35 years, your benefit calculation will include zero-income years, which will ultimately reduce your checks.

Smiling mature couple looking at camera

Image source: Getty Images.

To give you an idea of how this works, say you earned $50,000, adjusted for inflation, every year for 35 years. Your Social Security benefit would be about $1,911 per month based on the current formula if you claimed at your full retirement age. More on that below. But if you only earned $50,000 over 34 years, you'd have a zero-income year factored into your calculation for your 35th year, which would reduce your monthly benefit to $1,873 per month, or $38 per month less. Over a decade, that amounts to over $4,500 less.

People typically earn more money later in their careers than they do when they're just starting out, so continuing to work as long as possible is one of the best ways to increase your Social Security checks. Once you've worked longer than 35 years, your higher-earning years will begin to displace your lower-earning years and this will raise your monthly benefit.

2. Boost your income today

As I mentioned above, your Social Security checks are based on your income during your working years, so anything you can do to increase that will also boost your Social Security checks. There are a few things you can try.

If you're happy at your current company, look for promotion opportunities or consider working some overtime to increase your annual income. Or if you don't care for your employer, you could check with other companies in your industry to see if they're hiring and offering a higher salary for the work you do.

You can also consider a side hustle, but if you go this route, you must remember to set aside taxes from your earnings. Apart from this being the law, it's essential for increasing your Social Security benefits, as only the income you've paid Social Security taxes on affects the size of your checks. 

3. Choose the right age to start claiming

Age is the other major factor that influences your Social Security checks. You must wait until your full retirement age (FRA) if you want the benefit you're entitled to based on your work history. That's 66 for those born between 1943 and 1954. Then, it rises by two months every year thereafter until it reaches 67 for those born in 1960 or later.

You can start claiming as early as 62, but doing so reduces the size of your checks. If you sign up as soon as you're eligible, you'll only get 70% of your scheduled benefit per check if your FRA is 67, or 75% if your FRA is 66. Starting this early could actually be the smarter choice if you don't expect to live long because you may not get any money from the program if you die before reaching the age you plan to claim at. You may also have to start benefits early whether you'd like to or not because you need the money to cover your living expenses. That's fine, but make sure you understand the long-term consequences to your benefits if you sign up early.

Every month you delay Social Security increases your checks slightly until you hit the maximum benefit at 70. That's 124% of your scheduled benefit if your FRA is 67 or 132% if your FRA is 66. Delaying Social Security until this age could mean a larger lifetime benefit if you live into your mid-80s or beyond, but not everyone will be able to afford to wait this long. Consider all of your options when deciding which is the best age for you to start benefits.

Unless you're ready to claim right now, it's impossible to predict exactly what your future Social Security benefits will be because your income will likely fluctuate over the years and the government could alter the Social Security benefit formula in the future. But the three above tips will still be relevant even if the program does see some cuts, so keep them in mind if you're trying to get the largest benefit possible.

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