Social Security will probably be one of your most important sources of retirement income. In fact, as many as 50% of all married couples and 70% of unmarried individuals get at least half of their income in retirement from it. Since the average Social Security benefit came to just $1,471 in 2019, this doesn't leave seniors much to live on.
Because you'll likely depend on these checks to help you maintain your quality of life, it's important you understand how to maximize the amount you receive. Here are three ways you can boost your benefit checks:
1. Work longer
Most people have to start Social Security upon retiring because otherwise, they won't have enough money to live on. Unfortunately, if you claim before the age of 70, you won't get your maximum benefit amount.
Benefits can be claimed as early as 62, but if you start them before your designated full retirement age (between 66 and 67, depending on your birth year), you'll see a reduction in your checks. The specific cut is based on how early you claim, but amounts to 6.7% for each of the first three years and an additional 5% per year if you claim more than three years before your FRA.
After FRA, you can earn delayed retirement credits every month until age 70. These result in a benefits increase equal to 8% for each year you wait.
Retiring early could also mean you don't work for a full 35 years. No matter how long you work, benefits are based on your average inflation-adjusted wage calculated over the 35 years you earned the most. Working less than 35 years means some $0 wages are factored in. If you work longer, delay claiming benefits to earn credits, and get your 35 years in, your checks should be much larger.
And if you are earning more at the end of your career than you did in your earliest working years, continuing to work beyond 35 years could boost your benefits even further. That's because you could replace some lower earning years with years in which you earned a higher salary, thus raising your overall average wage.
2. Increase your income
As mentioned above, the amount of your Social Security benefit is based on your average wages over the 35 years when you earn the most, after adjusting for inflation. Because of this, raising your income during your career can result in bigger benefits based on the increase in your average wage.
If you aggressively negotiate your salary each time you get a new job and you earn raises annually, your income will likely be much higher -- and you'll get larger Social Security checks as a result. You could also boost your income by taking on a side gig if you really want to maximize your checks. Only income up to each year's wage-base limit counts, though.
3. Explore all of your options for getting benefits
If your current spouse earns more money than you do, you might be better off getting Social Security benefits based on your spouse's work record. You could also claim benefits based on an ex-spouse's work record if you were married for at least 10 years and you haven't remarried since the divorce. And if your spouse passed away, it's possible survivors benefits might be higher than the benefits under your own work history.
You can't count on the Social Security Administration to advise you on how to maximize your benefits since a report from the Office of the Inspector General found that staff advice caused widows and widowers to miss out on as much as $132 million in benefits. To make sure you don't lose any money you're entitled to by choosing the wrong Social Security strategy, research all of your options before claiming.
Earning bigger checks is worth the effort
A larger Social Security check can mean more income for the rest of your life because you keep this higher amount for every future check and because all future cost-of-living increases are equal to a percentage of your initial benefit amount.
It's worth learning how the program works and being careful about when you claim, in order to max out these important benefits.