In 2022, the average Social Security retirement benefit will be $1,657 per month. An annual retirement benefit of just $19,884 isn't particularly generous and doesn't come close to covering the necessities.
The good news, though, is that while Social Security won't ever be enough to fully support you, there are ways to boost the average benefit so you get more than the typical retiree.
Here are some steps you can take if you're hoping to get monthly Social Security income that's well above the average.
1. Delay your benefits claim
Putting off the time you start your checks can help you to get a benefits boost.
- You'll receive your standard benefit (based on average wages) if you first start getting retirement checks at full retirement age (FRA). That's between 66 and 2 months and 67, and is based on your birth year.
- You'll receive a reduced benefit if you claim before FRA. The reduction is 5/9 of 1% per month up to 36 months early, and then an additional 5/12 of 1% for each additional month.
- You'll receive a benefit increase of 2/3 of 1% per month for each month you wait to file for benefits after FRA until age 70.
If your full retirement age is 67 and you wait until then to start your checks instead of claiming at 62, you'll avoid a 30% cut to benefits. And if you wait until 70 instead of claiming at an FRA of 67, you'll get a 24% increase from the standard benefit that would've been available at 67.
If your goal is to beat the average benefit most people receive, it makes sense to delay the start of your checks to raise your monthly income as much as you can.
2. Focus on raising your income
The standard benefit retirees get at FRA is calculated using a formula that takes into account the average wage you earned in your 35 highest-earning years. If you can find ways to increase the amount of income you have during as many years of your career as possible, the wage your benefit is based on should be higher.
The more years you earn more than the typical American does, the better your chances of substantially beating the $1,657 average benefit. On the other hand, if you have many years when you don't earn much, chances are good that your Social Security income will be below what your peers receive.
3. Be strategic about how long you work
Social Security always uses the same formula that bases benefits on average wages in 35 years. This is true whether you work 15 years or 45 years. The difference is, those who work fewer than 35 years end up with wage years of zero included in the average wage that sets their benefits. And those who work longer will have more-than-enough years of income, so some of their lowest earning years won't count and drag their average down.
Often, wages you're earning later in life are higher even on an inflation-adjusted basis than what you earned earlier in your career. When that's the case, continuing to work at that higher salary can boost your benefit, potentially to a level well above the $1,657 average.
4. Work with your spouse to decide when to file benefits
Finally, if you're married, you may be able to ensure that one or both spouses get a benefit above the average by working together to decide who should claim benefits at which specific time. Often, the best financial move is for the higher-earning spouse to delay starting checks as long as possible until age 70 because early-filing penalties and delayed retirement credits have a bigger impact on a larger benefit. That's true since these penalties and credits are based on a percentage of average wages.
Whether you can beat the average benefit using any of these techniques will depend on your earning power. But if you maximize your salary and make a strategic-benefits claiming plan with your spouse, chances are good you'll be able to walk away with more than the typical retiree.