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4 Social Security Secrets for Even Bigger Checks

By Christy Bieber - Apr 3, 2021 at 6:05AM

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They can help you boost your retirement income.

Maximizing your Social Security benefits can go a long way toward making your retirement years more secure. After all, these benefits will last for the whole of your life, so you won't have to worry about them running dry as you reach your later years. 

But how can you get the largest Social Security checks possible? Just follow these four tips -- some of which you'll need to put into practice early in your life in order to make them as effective as possible. 

Older couple reviewing paperwork with financial advisor.

Image source: Getty Images.

1. Claim your benefits as late as possible

Retirees who wait to claim Social Security benefits are rewarded with larger monthly checks.

See, everyone has a full retirement age (FRA), which is determined under the law based on their birth year. It's between 66 and 2 months and 67. Retiring prior to your FRA will result in a reduction of the size of your monthly check due to early filing penalties.

But just waiting until FRA isn't enough to get the maximum monthly income from Social Security. You'll have to wait until 70 for that because you're allowed to earn delayed retirement credits until then. These credits result in as much as an 8% annual increase to your benefits by raising the amount a little bit each month. 

2. Work for at least 35 years (or longer)

Every retiree's Social Security benefits are calculated using a formula that takes their highest 35 years of (inflation-adjusted) earnings into account. Retirees who work less than 35 years will see some years of $0 wages included in their formula, which reduces the size of their checks. To maximize your checks, make sure you put 35 years in. 

If you reach your peak earnings at the end of your career, you may actually want to work for even longer. By doing so, you can replace years of lower earnings with years of higher ones, leading to a higher monthly benefit. The more low-earning years you can push out by staying in the workforce for extra years, the bigger your checks will be. 

3. Maximize your income

Since your benefits are based on your earnings, increasing your income will result in higher monthly checks. Aim to do this by improving your skills so you can advance in your career and by advocating for yourself during performance reviews or interviews, negotiating the highest salary possible. Working a side job can also boost your income, and your benefits. 

4. Invest in a Roth retirement account

Around half of all retirees are subject to tax on Social Security -- and a growing number of retirees will owe federal taxes on their benefits in the future. That's because there's an income threshold at which benefits become taxable, but that threshold isn't indexed to inflation. As a result, more people will be above it each year. 

If your benefits are taxed, you'll lose part of them. But you may be able to avoid this by choosing to invest in a Roth 401(k) or Roth IRA instead of a traditional one. Distributions from Roth accounts don't count when your income is calculated for purposes of determining if Social Security benefits are taxable. That means you can have a higher income in retirement without having to give up part of your checks to the IRS. 

By claiming benefits at 70, working for at least 35 years, earning as much as possible, and opting for Roth accounts, you'll set yourself up for Social Security checks that are as generous as they can be. 

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