In case you haven't heard the news, Social Security's not looking so good. The latest Trustees Report has the most dismal outlook to date. The trust funds that keep the program going are estimated to be depleted by 2033, according to the latest estimates. After that, the program could face benefit cuts if the government doesn't step in.
That's a huge concern for seniors and workers who hope to one day benefit from the program they've spent their lives paying into. But unfortunately, there's not much we can do to control what happens with Social Security.
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There are steps we can take to increase our benefits, though. And these should work regardless of whatever happens to the program in the future. Here are three things you can start doing right now to squeeze as much out of Social Security as possible.
1. Try to increase your income
Your Social Security benefit is based on how much income you pay Social Security taxes on throughout your career, and this shouldn't change even if the program faces cuts or other alterations. So anything you can do today to boost your income should also help your future Social Security checks.
There are several ways you could make this happen. You could work overtime at your existing job, or negotiate a raise. Or you could look for better-paying opportunities elsewhere. It's never been easier to start a side hustle, so that's another option.
The only people this tip won't work for are those who are already earning more than the maximum income subject to Social Security taxes. In 2023, that's $160,200. The government may raise or eliminate this ceiling in the future, in which case high earners may also be able to increase their Social Security benefits by raising their income. But for the time being, this strategy will only help those with incomes below this threshold.
2. Plan to work longer
The current Social Security benefit formula looks at your average monthly earnings over your 35 highest-earning years. It's to your advantage to remain in the workforce for at least this long before claiming if you want the largest possible checks. Claiming Social Security before you've worked 35 years means you'll have zero-income years factored in that will reduce your benefits.
There aren't any downsides to working longer, though. A lot of people earn more later in their careers than they did starting out. Once they've surpassed 35 years, the government starts dropping some of their earlier, lower-earning years from their benefit calculation and replacing them with their more recent, higher-earning years, resulting in larger checks.
3. Choose your starting age carefully
You can apply for Social Security as soon as you turn 62, but if you do this, you won't receive the full benefit you qualify for. You become eligible for this by waiting until your full retirement age (FRA) to sign up. This is currently anywhere from 66 to 67, depending on your birth year. There has been some talk about raising this to help combat Social Security's funding issues, but nothing's been decided yet.
Even if FRA increases, what's not going to change is that you'll get more from the program the longer you wait to sign up. Every month you delay boosts your benefit a little until you qualify for your largest possible checks at 70.
That's not to say delaying is always your best bet. If you don't expect to live past your 70s or you can't afford to pay your bills without Social Security, signing up early could be the better choice. But if these issues don't apply to you, you could wind up with a larger lifetime benefit by delaying Social Security for a while rather than signing up right away.
You can estimate what kind of a difference this could make to your checks by creating a my Social Security account. There's a calculator there that can show you what kind of benefit you'd qualify for at various starting ages. Keep in mind this is based on estimates of your future earnings and today's Social Security benefit formula, so your actual benefit could be different, especially if you're a long way from applying. But you can use this as a baseline to determine which starting age makes the most sense for you.
To estimate your lifetime benefit for a given claiming age, just multiply your estimated monthly benefit by the number of months you expect to receive checks. For example, if you think you'll claim a $2,000 monthly benefit for 20 years, or 240 months, your lifetime benefit is $480,000.
Choose a tentative starting age for now, but be ready to revise it if the government changes some of Social Security's rules. And do your best to build up your personal retirement savings as well so you aren't as affected by benefit cuts if they do happen.
