Social Security was never designed to sustain seniors in the absence of other income. At its core, what the program really does is keep beneficiaries out of poverty. It can pay for things like modest housing, transportation, food, and a few other necessities, but it can't afford most seniors the comfortable lifestyle they want in retirement.
Why so? Well, those benefits will generally replace about 40% of the average earner's pre-retirement income (and an even smaller percentage for higher earners). Most retirees, however, need somewhere in the ballpark of 70% to 80% of their former earnings to afford luxuries like restaurant meals, leisure activities, cable TV, and other such nice but technically nonessential expenses.
That's why seniors are generally advised to have an income source outside of Social Security, whether it be savings in an IRA or 401(k), rental income, or earnings from a part-time job. Yet 21% of married seniors and 44% of unmarried seniors rely on Social Security for 90% or more of their income.
Of course, saving independently is a good way to ensure that you have enough money to lead a reasonably comfortable lifestyle once you stop working. But if you expect Social Security to be your main source of income in retirement, here are a few steps you can take to boost those benefits.
1. File at age 70
Your Social Security benefits will be calculated based on your top 35 years of earnings, but the age at which you file could cause them to go up, go down, or stay the same. If you file at your precise full retirement age, you'll get the exact amount your earnings record entitles you to. If you file early, you'll reduce your benefits in exchange for getting access to your cash sooner. But if you delay your benefits past full retirement age, you'll boost them by 8% a year up until age 70, at which point that incentive runs out. This means that if you're looking at a $1,400 monthly benefit at a full retirement age of 67, waiting until 70 will give you an extra $336 a month -- for life.
2. Review your earnings statements
Since, as we just learned, your Social Security benefits are earnings-based, inaccurate information about your work history could cause them to get needlessly reduced. That's why it's crucial to review your earnings statements from the Social Security Administration (SSA) year after year and report any errors you spot immediately. If, for example, the SSA has no earnings on file for you for a given year in which you actually earned $60,000, that could lower your benefits -- in which case you'd want to dig up pay stubs, tax returns, or anything else that proves that you did indeed earn that money.
Keep in mind that you won't get copies of your earnings statements in the mail unless you're 60 or older. If you're younger, you'll need to create an account on the SSA website and access them yourself.
3. Fight for a raise at work
The more money you earn at work, the higher your Social Security benefits will be, so if you have reason to believe you're underpaid, go ahead and ask for more money. You can also request a boost if you've been with the same company for a long time and haven't gotten a raise in years, even if your compensation is relatively in line with what the average person in your industry makes.
Of course, it helps to go into that conversation prepared with talking points, so beforehand, make a list of the things you do that add unique value to your company, and come in with data that can drive home your argument (like the fact that your training program led to a 20% decrease in order processing errors, just as an example). Incidentally, getting a boost in income might also allow you to build a modest nest egg of your own, thereby decreasing your reliance on Social Security ever so slightly.
Ideally, Social Security should not constitute the bulk of your income in retirement. But if that's the reality you're facing, take the above steps to boost your benefits so you get a bit more money when you need it.