Social Security forms the backbone of many seniors' retirement plans, but alone it's not enough for a luxurious -- or even a comfortable -- existence. The average retired worker only receives about $1,840 per month, or about $22,000 per year. And some fear that potential benefit cuts could place an even bigger financial burden on recipients in the near future.
It's best to have personal savings to supplement your Social Security benefits, but not all workers can manage this. Scraping by is one way to handle this dilemma, but it may not be your only option. Here are three things seniors can try to get a little more out of Social Security.
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1. Take steps to increase your benefits before you claim
You'll have the best shot of increasing your Social Security checks if you begin before you apply. The Social Security Administration calculates your benefit based on the amount you've paid Social Security taxes on over the years. Earning more, and thus paying more in taxes, translates to higher benefits in the future.
The only people this doesn't work for are those who already have very high incomes. In 2023, you only pay Social Security payroll taxes on the first $160,200 you earn. Additional income won't boost your future benefits.
But as most of us can only dream of this type of income, that's not usually a concern. Doing things like negotiating a raise, finding a better-paying job, or starting a side hustle can all boost your income today and help your Social Security checks in the future.
2. Choose the right claiming age for you
Your age at sign-up has a huge effect on the size of your checks. You can apply as early as 62, but you need to wait until your full retirement age (FRA) -- 66 to 67, depending on your birth year -- to claim the benefit you've earned based on your work history. Claiming under this age shrinks your checks by up to 30%. That means if you qualify for the average $1,840 benefit at your FRA of 67, you'd only get $1,288 per month by applying right away.
You grow your checks a little at a time by waiting to sign up. This continues until you reach 70, when you qualify for your maximum monthly benefit. That's anywhere from 124% to 132% of your full benefit, depending on your FRA.
This might make it seem like delaying benefits is always the way to go, but that's not true. Delaying can make sense if you can afford to cover your living expenses without Social Security and you expect to live into your 80s or beyond. But if one or both of those criteria don't apply to you, it's often more advantageous to sign up for benefits right away.
You must decide the best claiming age for yourself based on your own estimation of your life expectancy and your assessment of your financial situation. You can estimate your monthly benefit at various starting ages by checking the calculator in your my Social Security account.
Choose a few ages you're considering and multiply their monthly benefit amounts by 12 to get your estimated annual benefits. Then, multiply these amounts by the number of years you expect to claim. For example, a $2,000 monthly benefit claimed for 20 years would give you $480,000 in total. Aim for the age you believe will give you the largest lifetime benefit whenever possible.
3. Claim benefits for all eligible household members
You may not be the only person in your household who can claim Social Security. If you're married, your spouse may also qualify for a benefit check even if they never worked. The Social Security Administration pays spousal benefits of up to 50% of the worker's benefit at their FRA if the spousal benefit is worth more than the spouse is entitled to on their own.
If you qualify for the $1,840 average monthly benefit and your spouse earns half of this, or $920 per month, that would give you a combined $2,760 per month. It may still not be enough to cover all your household expenses, but it'll go quite a bit further than your check alone.
You may be entitled to further benefits if you have dependent children in the home. This includes minor children, stepchildren, or grandchildren as well as adult children who were disabled before 22. In this case, claiming early might be wise because your children cannot apply for benefits on your work record unless you're also receiving them. However, doing so could permanently reduce the size of your own checks if you're under your FRA.
Reach out to the Social Security Administration if you have questions about which household members can apply for benefits on your work record. It can also advise you about what documents each person needs in order to verify their identity and their eligibility.
Even if you follow all these steps above, it might not be possible to cover all your expenses with Social Security. Hopefully, you have some personal savings to fall back on. If not, you may have to consider working part-time or seeking out additional government assistance to make ends meet.
