Whether you kick off your golden years with a modest amount of savings or no savings at all, you'll want to get the most money possible out of Social Security. These simple steps will help you boost your benefits and enjoy a higher retirement income stream for life.
1. Work at least 35 years
Your Social Security benefits are based on your 35 highest-paid years of wages. But not everyone works a full 35 years. Some people take time off to raise children. Others leave the workforce to travel, care for loved ones, or recover from injuries or illnesses. If you don't have a full 35 years of work under your belt, extending your career could give your benefits a much-needed boost. In doing so, you'll replace the $0 you'd otherwise get in your benefits equation for each year without an income with an actual salary, thereby bringing up your average wage over that 35-year period.
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Furthermore, it often pays to work more than 35 years if your goal is to grow your benefits. The reason? If you're making more money later on in life than you did earlier in your career, you can replace some years of lower earnings with higher earnings, thereby boosting your average wage to bring up your total benefit.
2. Delay benefits past your full retirement age
Though your Social Security benefits are based on your work history, you're not eligible to claim them in full until you reach full retirement age. That age, depending on your year of birth, is either 66, 67, or somewhere in between.
Keep in mind that the Social Security Administration will let you take benefits as early as age 62, but in doing so, you'll reduce them in the process. At the same time, you can also delay benefits past full retirement age and boost them by 8% a year up until age 70. This means that if you're entitled to $1,500 a month at a full retirement age of 67, waiting until 70 to claim your benefits will give you $1,860 a month instead -- for life.
3. Boost your work skills to snag a raise
Your Social Security benefits are based on your earnings, so the higher your income, the higher they stand to be. That's why it pays to grow your skills to make yourself the most valuable employee possible. In doing so, you're more likely to snag merit-based raises that will not only put more money in your pocket from year to year, but also boost your Social Security benefits during retirement.
How might you improve on the skills front? For one thing, you can see about getting certified in a specific area within your field, whether it's information technology, project management, or education. You can also work on boosting your soft skills -- things like communication, problem-solving, and organization.
Perhaps Social Security will constitute your primary source of income in retirement. Or maybe it'll represent just a fraction of your total income. Either way, you paid into the system throughout your career, so you deserve to enjoy those benefits now that you're older. Make these moves, and you'll be looking at a higher payout from Social Security throughout retirement.
