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How to Squeeze Extra Money Out of Social Security

By Maurie Backman – Oct 22, 2021 at 7:02AM

Key Points

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A higher payday could be yours -- if you play your cards right.

You may come to rely heavily on your Social Security benefits once you retire. This especially holds true if you don't manage to sock much money away in an IRA, 401(k), or another savings plan.

If you're counting on Social Security to get you through retirement, then you'll need to be strategic about raising your benefits. Here are a few tricks that'll help you get more money out of the program.

Two smiling people at laptop.

Image source: Getty Images.

1. Boost your earnings with work you do on the side

The money you get from Social Security every month in retirement isn't just an arbitrary sum. Rather, there's a special formula that's used to calculate benefits.

In a nutshell, your benefits are based on your earnings during your 35 highest-paid years in the labor force. And if you're able to get a second job, you can boost your earnings for a higher benefit down the line.

It's easy to think of a side hustle as a means of funding your vacations or tech purchases. But remember, that income will count toward your future Social Security benefit, so it's worth pushing yourself to earn it.

2. Delay your filing until age 70

You're entitled to your full monthly Social Security benefit based on your wage history once you reach full retirement age, or FRA. FRA is 67 if you were born in 1960 or later.

But you don't have to sign up for benefits at FRA. You can claim Social Security at a reduced rate beginning at age 62 or delay your filing until the age of 70 and grow your benefits in the process. For each year you hold off on claiming beyond FRA, your benefits will rise 8%.

Say you're entitled to a monthly benefit of $1,600 at an FRA of 67. If you wait until age 70 to sign up to receive it, you'll score $1,984 instead.

Remember, too, that your benefits will be boosted for each month you delay your filing. If you only manage to hold off on signing up for Social Security for a half a year beyond FRA, you'll get a 4% bump in your benefits.

3. Coordinate with your spouse

If you're married, and you and your spouse are each entitled to a Social Security benefit, you have an opportunity to eke out some more money -- even if you can't necessarily delay your retirement until the age of 70. What you can do in this situation is have one earner file for benefits at FRA or even sooner so your household has some money coming in. At the same time, the other earner can delay their filing for a larger benefit.

Often, it pays to let the higher earner be the one who delays signing up for benefits. But you can do the opposite if that works better for your household.

Get more out of Social Security

No matter how solid a nest egg you bring into retirement, it pays to snag as high a Social Security paycheck as possible. These tips could be your ticket to boosting your monthly benefit for life -- and enjoying the spending power that it buys you.

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