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4 Social Security Steps to Take 10 Years Before You Retire

By Catherine Brock – Oct 12, 2020 at 9:27AM

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You still have time to influence your Social Security income.

Social Security isn't going to fund a glamorous retirement on its own, but that's no reason to be casual about maximizing your benefits. Every extra dollar you glean from Social Security is a dollar you don't have to pull from your savings account, after all. If you want to get the most from your Social Security check -- and who doesn't? -- make these four moves at least 10 years before your planned retirement date.

1. Know your full retirement age

Your Full Retirement Age or FRA is the age you qualify for your full Social Security benefit. For anyone born in 1943 or later, FRA is somewhere between 66 and 67 years old. As shown in the table below, your exact FRA is based on the year you were born.

Birth Year

Full Retirement Age

1943 to 1954

66

1955

66 and 2 months

1956

66 and 4 months

1957

66 and 6 months

1958

66 and 8 months

1959

66 and 10 months

1960 and later

67

Table data source: SSA.gov

Couple reviewing finances with their laptop at home.

Image source: Getty Images.

It's useful to know your FRA because your benefit amount is adjusted up or down based on your age at filing, relative to your FRA. At FRA, you get your full benefit as calculated from your earnings history. But if you file earlier than FRA, your benefit can be reduced by up to 30%. You also have the option to file after your FRA, as late as age 70, which could increase your benefit by up to 24%.

You can see how dramatically timing can affect your benefit amount in the table below. A $1,500 full benefit can be adjusted down to $1,050 or up to $1,860, depending on when you claim.

Benefit at Age 62

Benefit at FRA

Benefit at Age 70

$700

$1,000

$1,320

$1,050

$1,500

$1,860

$1,400

$2,000

$2,400

Table data source: Author calculations.

2. Estimate household benefits

The simplest way for you and your spouse to estimate your future benefits is to create accounts at my Social Security. The interface projects your benefits at different claiming ages using your actual earnings history.

Know that your individually earned benefits may not tell the whole story if one of you has had much higher earnings than the other. Let's say you have historically earned more than your spouse. In that case, your spouse may qualify for his or her own benefit or up to 50% of your benefit, whichever is higher. The 50% spousal benefit is reduced if it's claimed before your spouse reaches FRA and cannot be collected until you start receiving your own benefit.

You can estimate the benefits your spouse would receive from your earnings record after logging into your account at my Social Security. Compare those estimates to your individual benefit estimates to get a handle on the Social Security income potentially available to your household.

3. Compare benefits to current income

Social Security won't cover all of your living expenses in retirement. For most people, it actually only replaces about 40% of working income. Assuming your expenses remain the same after you leave the workforce, that creates an income shortfall of 60%.

It's important for you to quantify the size of your own income shortfall at different claiming ages. That way, you know where you stand while you still have the time to address it.

4. Make a plan

You have two levers available to raise your Social Security benefit. Timing, as noted above, is one of them. The other is your income. Your Social Security benefit is calculated from an average of your highest-paid 35 years of working -- when you raise that average, your benefit goes up, too.

You can test this from your account page at my Social Security. Look for the box where you can specify your average future salary -- try inputting numbers that are $5,000, $10,000, or $15,000 more than you make today to see how it changes your benefit at different claiming ages. That should give you a clear picture of how much influence you have over that benefit amount.

The numbers may convince you to delay your Social Security application until age 67 and raise your income by $10,000 a year, for example. Your next steps might be to ask your boss about promotion opportunities or look for part-time work on the side.

Work the system

You do have some control over the size of your future Social Security benefit, as long as you know which levers to pull. Size up where your benefits stand today, then adjust your timing and take steps to raise your income for a higher benefit tomorrow.

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