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Worried Social Security Won't Pay You Enough? This Simple Move Could Give You an 8% Raise

By Maurie Backman – Aug 20, 2021 at 6:18AM

Key Points

  • Social Security could end up being an important income source for you in retirement.
  • If you're scared you won't get enough from your benefits, you may be able to snag more money by filing at the right time.

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Here's an easy way to squeeze more money out of Social Security.

Many seniors today rely on Social Security to cover their bills. But if you plan on Social Security providing the majority of your retirement income, you may wind up disappointed and cash-strapped.

As of July 2021, the average senior on Social Security was receiving about $1,557 each month. If you can't imagine being able to pay your bills on that sum, then it's imperative that you start socking money away in a retirement savings plan as soon as possible.

That said, there is a way for you to grow your monthly benefit and eke out more money from Social Security. In fact, this very simple move could raise your benefit by a cool 8%.

Person at laptop

Image source: Getty Images.

Hold off on signing up

The monthly Social Security benefit you're entitled to collect in retirement will be based on your earnings history -- specifically, the wages you received during your 35 most profitable years in the labor force. From there, you can collect your full monthly benefit at full retirement age, or FRA.

FRA depends on your year of birth, as follows:

Year of Birth

Full Retirement Age

1943-1954

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 or later

67

Data source: Social Security Administration.

However, you don't have to claim Social Security at FRA on the nose. You're allowed to sign up early (starting at age 62) and reduce your monthly benefit in the process. Or you can delay your filing past FRA. For each year you do, your benefit will increase 8%, up until the age of 70.

Of course, holding off on claiming Social Security until age 70 may be unrealistic. You may not have the ability or desire to keep working until that point.

While delaying your filing for many years may be a difficult task, delaying your filing one year may be more doable. If your FRA is 67 and you hold off on taking benefits until age 68, you'll snag an 8% raise that will remain in effect for the rest of your life.

If you're entitled to $1,557 a month in Social Security, waiting one year to sign up for it will increase your monthly benefit to about $1,682. Or to put it another way, you'll get about $125 extra per month. That could go a long way in making it easier to cover your bills.

If you are able to delay your Social Security filing all the way to age 70, you'll snag an ever bigger raise for yourself. And if you're entering retirement with very little savings, that's something that may be worth doing.

But if delaying your filing for three years (or more, depending on your FRA) seems daunting, then compromise by holding off on claiming benefits for a single year. Doing so could buy you a lot more financial flexibility in retirement.

Remember, even if you kick off your senior years with a decent chunk of savings, that money isn't guaranteed to last. The great thing about Social Security is that the higher a benefit you start with, the more income the program will pay you throughout your retirement.

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