Approximately one in five baby boomers say Social Security benefits will be their only source of income in retirement, according to a survey conducted by the Nationwide Retirement Institute.
Social Security benefits aren't designed to be your sole income source in retirement, and the average retiree only receives around $18,500 per year in benefits. But if you're going to be depending on Social Security in any capacity during retirement, it's a good idea to maximize your monthly checks. Here are a few ways to boost your benefits with next to no effort.
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1. Take advantage of all the benefits you're entitled to
You may already know if you're entitled to collect retirement benefits, but there are other types of Social Security benefits available, too. For instance, in addition to your standard retirement benefit amount, you may also be eligible to receive spousal benefits, divorce benefits, or survivors benefits.
Spousal benefits are available to those who are at least 62 years old and are married to someone who is eligible to collect retirement benefits. With divorce benefits, you must be at least 62 years old, you cannot currently be married, and your ex-spouse must be entitled to Social Security benefits. In both cases, the maximum you can receive is 50% of the amount your spouse or ex-spouse is eligible to collect at his or her full retirement age.
If you're financially dependent on someone and that person passes away, you may be entitled to survivors benefits. Survivors benefits are generally available to widow(er)s, but in some cases, they're also available to children, parents, and other family members.
2. Invest in a Roth IRA to reduce Social Security taxes
Half of retirees will pay taxes on their Social Security benefits, according to a report from the Senior Citizens League. By investing in a Roth IRA, though, you can reduce or even eliminate Social Security taxes and keep more of your money.
Whether or not you owe taxes on your benefits will depend on your combined income. Your combined income is half your annual Social Security benefit amount plus all other sources of income. You'll owe taxes on your benefits if your combined income is higher than $25,000 per year, or $32,000 per year for married couples filing jointly.
The good news is that Roth IRA withdrawals don't count toward your combined income. So if the majority of your savings are stashed in a Roth IRA, that can reduce combined income and help you avoid Social Security taxes.
3. Make sure you've worked at least 35 years before you begin claiming
When calculating your benefit amount, the Social Security Administration will take an average of your income over the 35 highest-earning years of your career, then adjust that number for inflation. If you haven't worked a full 35 years when you file for benefits, you'll have zeroes added to your average, which will reduce your benefit amount.
Before you start claiming Social Security, add up the total number of years you've spent working. If you haven't reached the 35-year mark just yet, working just a little longer could result in more money from Social Security each month.
Maximizing your Social Security checks can help you enjoy a more comfortable retirement. It's easier than you may think to earn bigger checks, and by making these three Social Security moves, you can effortlessly boost your benefits.
