There's a really good chance you'll be reliant on Social Security when you retire. According to data from the Social Security Administration, 62% of today's retirement-aged beneficiaries lean on the program to provide at least half of their monthly income. Of these folks, 34% rely on Social Security for virtually all of their income (90% to 100%).
As for future retirees, national pollster Gallup found a strong expected reliance in an April 2018 survey. When polling nonretirees, Gallup observed that 30% expect Social Security to be a "major source" of income during retirement, with another 54% forecasting it to be a "minor source" of income. Overall, this combined 84% that will need Social Security in some capacity when they retire ties a high-water mark for nonretirees over the past 15 years.
Yes, you can still boost your Social Security benefits while in your 60s
Because of its clear importance, few things have a higher priority for seniors in their 60s than getting as much as possible from the Social Security program. But what you may not realize is that folks in their 60s still have options available that can help boost their eventual monthly and/or lifetime payout. If you're in your 60s, or nearing your 60s, here are three ways you can still boost what you'll receive.
1. Be patient
Without question, the easiest way to increase what you'll be paid by Social Security is to simply be patient.
You see, eligible beneficiaries -- those who've earned the 40 lifetime work credits required to receive a retired worker benefit -- can begin receiving their payout at age 62, or any point thereafter. There is, however, a big incentive to hold off on claiming benefits early. For each year that you simply wait, your eventual monthly benefit, which is based on your work and earnings history, will grow by approximately 8%, up until age 70.
Depending on your birth year, claiming as early as possible, at age 62, could mean accepting a 25% to 30% permanent reduction in your monthly payout. Conversely, waiting until age 70, the last point at which benefits continue to accrue, might net a 24% to 32% bonus over what you would have received at your full retirement age (FRA). Your FRA is the age that you're eligible to receive your full retired worker benefit, and it's determined by your birth year.
If we were to look at two identical individuals with the same birth year, income, and length of work history, the one claiming at age 70 could take home 76% more per month than the one claiming at age 62.
2. Take advantage of your work experience and skills
Other than simply waiting, another consideration to make is to work longer.
Now, I fully understand that not all senior citizens want to be in the workforce in their 60s, and that's perfectly OK. But here's an important point to keep in mind: By your 60s, you'll have amassed a lifetime of skills and work experience that may allow you to command a higher hourly wage or salary.
Why's this important? As noted, your retired worker benefit takes into account your work and earnings history. Specifically, your 35 highest-earning, inflation-adjusted years are what will determine your benefit at full retirement age. For each year less of 35 worked, a zero ($0) is averaged in. Therefore, working a few extra yeas, if you don't have 35 years of work under your belt, could provide a healthy boost to your eventual payout.
In addition, landing a well-paying job in your 60s with your acquired skills and experience could help replace a lower, inflation-adjusted year of income from when you were younger and lacked the skills or work experience to be paid a good wage. This could lift your average annual payout over your 35 highest-earning years.
3. Don't forget about SSA-521
Finally, don't forget about Social Security's secret weapon, Form SSA-521, which is officially known as the Request for Withdrawal of Application.
As the title implies, this form gives beneficiaries the right to request that their benefits claim be undone within the first 12 months of receiving benefits. Should the Social Security Administration grant the request, it'll be as if the original payouts never occurred. In other words, your eventual payout will again be growing at approximately 8% per year until you do decide to claim it in the future.
There is, of course, a catch. To qualify, you'll have to repay every cent you, or someone who's made a claim based on your earnings history -- such as a spouse -- have received. And, as pointed out, you have to do this within the first 12 months of receiving benefits.
This Social Security mulligan can be particularly useful if you regret your decision to enroll early for benefits, but land a well-paying job within 12 months. This job, which can cover your daily expenses, may allow you to undo your claim and repay what you've received from Social Security. More importantly, your benefits will keep growing.
Just because you're in your 60s, it doesn't mean you lack the flexibility to increase your Social Security payout.