For most retired Americans, their Social Security benefit represents an indispensable source of income. Over 20 years of annual surveys from national pollster Gallup have consistently shown that between 80% and 90% of then-current retirees lean on their monthly payout in some capacity to cover their expenses.
Considering how vital Social Security is to the financial well-being of our nation's aging workforce, it's ideal to get as much out of America's top retirement program as possible. This is especially true for baby boomers, who, based on their birth year (Americans born between 1946 and 1964), are being confronted with one of the biggest decisions of their life: When to claim their retired-worker benefit.
As we prepare to lift the curtain on a new year, there are three particularly smart options select baby boomers have available to increase their Social Security benefits in 2024.
Image source: Getty Images.
Be patient
Sometimes, the easiest and smartest thing to do is simply sit on your hands. That's why being patient is the first choice baby boomers can make in 2024 to boost their Social Security check.
When the Social Security Administration (SSA) calculates a worker's payout, they utilize four factors:
- Work history
- Earnings history
- Full retirement age
- Claiming age
This fourth component, claiming age, has the potential to swing the payout pendulum more than any other factor. Even though eligible workers who've earned the required 40 lifetime credits to receive a Social Security benefit can begin taking their monthly payout at age 62, there's a pretty big incentive for those who are patient.
Beginning at age 62 and continuing through age 69, Social Security retirement benefits can grow by as much as 8% per year for those willing to wait. Workers claiming their benefit prior to reaching full retirement age -- i.e., the age that an eligible worker is entitled to 100% of their payout -- can expect a permanent monthly reduction of up to 30%, depending on their birth year. Meanwhile, waiting all the way until age 70 (i.e., the year when benefits stop accruing) can lift monthly benefits by 24% to 32% above what retirees would have received at their full retirement age.
The difference in monthly payouts based on claiming age can be substantial, as shown in the table below.
| Birth Year | Age 62 | Age 63 | Age 64 | Age 65 | Age 66 | Age 67 | Age 68 | Age 69 | Age 70 |
| 1943-1954 | 75% | 80% | 86.7% | 93.3% | 100% | 108% | 116% | 124% | 132% |
| 1955 | 74.2% | 79.2% | 85.6% | 92.2% | 98.9% | 106.7% | 114.7% | 122.7% | 130.7% |
| 1956 | 73.3% | 78.3% | 84.4% | 91.1% | 97.8% | 105.3% | 113.3% | 121.3% | 129.3% |
| 1957 | 72.5% | 77.5% | 83.3% | 90% | 96.7% | 104% | 112% | 120% | 128% |
| 1958 | 71.7% | 76.7% | 82.2% | 88.9% | 95.6% | 102.7% | 110.7% | 118.7% | 126.7% |
| 1959 | 70.8% | 75.8% | 81.1% | 87.8% | 94.4% | 101.3% | 109.3% | 117.3% | 125.3% |
| 1960 or later | 70% | 75% | 80% | 86.7% | 93.3% | 100% | 108% | 116% | 124% |
Data source: Social Security Administration.
Work another year
The second smart choice baby boomers can make to increase their Social Security benefits in 2024 is to remain in the labor force for another year.
As I pointed out earlier, the SSA has four factors it turns to when calculating Social Security benefits for retirees. The first of these two components -- your work history and earnings history -- are linked at the hip.
The SSA takes into account your 35 highest-earning, inflation-adjusted years when determining your monthly check. If you earn more, on average, throughout your lifetime, there's a good chance you'll receive a beefier monthly payout from Social Security during retirement.
But what's important to note is that mature workers tend to enjoy higher average annual salaries than their younger counterparts. Workers in their 60s are liable to have more experience in their respective field(s) and are therefore able to command higher annual salaries or wages.
According to data from the U.S. Bureau of Labor Statistics from the third quarter of 2023, the average annualized earnings for full-time wage- or salary-earners between the ages of 55 and 64 and 65-plus was, respectively, $63,544 and $58,656. That compares to average annualized earnings of $38,012 for workers aged 20 to 24 during the third quarter.
By working an extra year, baby boomers are very likely going to knock out one of their lower-earning, inflation-adjusted years from when they were younger and replace it with a higher-earning year. When the SSA eventually calculates their monthly benefit, it'll be incrementally higher.
Image source: Getty Images.
Lean on Social Security's do-over clause
The third smart way select baby boomers can increase their Social Security benefit in 2024 is by relying on a little-known do-over clause, SSA-521 (officially known as "Request for Withdrawal of Application").
Historically speaking, most retirees begin taking their Social Security payout prior to reaching full retirement age. Nearly two-thirds of all current retirees have their monthly payout permanently reduced due to an early claim.
While many of these early claims were made with a purpose, some early filers do regret their decision. That's where SSA-521 can come into play.
SSA-521 is a request to undo your Social Security retired worker benefit claim. If it's approved by the SSA, your early claim is undone, and your benefits, once again, begin accruing by up to 8% per year through age 69. This do-over clause can be particularly useful for baby boomers who land a well-paying job shortly after making an early claim that they've come to regret.
However, there are a couple of drawbacks with SSA-521 that baby boomers need to be aware of. To start with, you only have up to 12 months after your benefit approval to submit this request. If you've been receiving benefits for a few years, SSA-521 is, unfortunately, not an option.
Likewise, this Social Security mulligan is a one-time affair. You can't stop and start your benefits on multiple occasions. This is a one-time do-over that can allow early claimants an opportunity to lift their monthly Social Security benefits through patience.
Lastly, workers will have to pay back every cent in benefits they've received from Social Security if the SSA approves their request. Keep in mind that this also includes any benefits a spouse or children may have received based on a worker's earnings history.
