Though single folks get the benefit of calling the shots and getting to live life on their own terms, they are at a key disadvantage when it comes to Social Security. That's because singles only get one source of Social Security income to rely on in retirement, whereas married couples get to collect either two separate payments based on individual earnings records, or one earnings-based payment and one spousal benefits payment.
Single earners might also have a harder time saving during their working years, and as such, they often retire with less in savings than married folks. In fact, 43% of singles aged 65 and over depend on Social Security to provide 90% or more of their income.
It's for these reasons single folks need to be extra vigilant about getting the most out of Social Security. Here are a few tips for boosting your benefits and ensuring a healthier income stream in retirement.
1. Work longer
Your Social Security benefits are based on your 35 highest years of earnings. Now if you're like most people, you probably started out making less money and eventually worked your way up. Therefore, if you reach your peak earnings when you're older, and can hold that same position for a few extra years, you'll boost your benefits by virtue of replacing some lower-earning years with higher earnings.
Here's an example. Let's say that of your 35 highest years of earnings, you made $40,000 for three of those years. Let's also say you're making $100,000 now. If you replace three years of a $40,000 salary with three more years of $100,000, you'll wind up with a higher total of eligible earnings, and thus a higher payout.
2. Fight for raises during your career
We just learned that your Social Security benefits are tied directly to the amount you earn during your working years. That's why it pays to ask for raises when you can prove you're being underpaid.
The best way to approach a salary negotiation is to come in having done your research. Sites like Glassdoor let you compare salary data based on factors like job title and geographic region, so if you can prove to your manager that folks in your position average, say, $3,000 more than you annually, he or she will have a harder time arguing that fact. Furthermore, the better a job you do of proving your individual value to your company, the greater your chances of a pay increase, so come equipped with a list of your accomplishments and data, where applicable, to back it up.
3. Hold off on claiming benefits as long as possible
Though your Social Security benefits are based on your earnings record, you have the ability to lower or boost those payments depending on when you first claim them. If you file for Social Security at full retirement age, which, for today's older workers, is 66, 67, or somewhere in between, you'll collect the full amount you're entitled to without a reduction or increase. On the other hand, if you hold off on filing for benefits past your full retirement age, you'll get an 8% boost for each year you delay.
This incentive does run out at age 70, so you can't just postpone your benefits indefinitely (well, you can, but there's no reason to). But if your full retirement age is 66, and you wait until 70 to start collecting Social Security, you'll boost each payment by 32%. And that could go a long way toward helping you cover your living costs in retirement.
Whether you're counting on Social Security to provide the bulk of your senior income, or you want to do the best possible job of supplementing your savings, it pays to develop a solid strategy during your working years. As a single person, you have just your own income and savings to rely on, so be sure to look out for yourself and put a little extra thought into retirement planning.