Your Social Security benefits will be one of your most important retirement income sources because these benefits won't end during your lifetime. Cost of living adjustments are also built into the benefits formula, which means that you won't lose ground due to inflation. Most other retirement income sources don't come with these guarantees.
Since your benefits can make a big impact on your financial security, it makes sense to do all you can to try to maximize them. Here are three things you can start doing now in order to make that happen.
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1. Increase your income
Trying to earn as much money as possible is one of the best things you can do for yourself if you want a larger future Social Security benefit. The retirement benefits formula gives you a percentage of average wages. So the higher your earnings throughout your career, the larger the Social Security check you'll receive.
Many people pass up the opportunity to maximize income by not negotiating for a higher salary when they get hired or by not asking for raises during performance reviews. You shouldn't pass up those chances to boost your earnings.
It's also a good idea to continue developing your job skills, keep tabs on the market rate for people in your field, and apply for new opportunities either with your current company or a different one.
Gaining new credentials and taking on side jobs are also techniques that could potentially help you massively increase your earning power and future retirement benefits.
2. Make a plan to claim benefits later in life
The Social Security benefits formula calculates your standard benefit based on average wages. But most people don't actually get their standard benefit, as that's available only if you get your first Social Security check at exactly your full retirement age.
You can claim Social Security anytime between age 62 and 70, but every month you get a check before FRA reduces your benefit. And every month you wait after it until 70 will allow you to earn a delayed retirement credit that increases it.
If your hope is to get the biggest Social Security check you can, you should make a plan to wait until 70 to claim it. Unless you think you'll be able to work that long, this means basing your retirement savings goals on the assumption your savings will have to support you by itself for several years before you finally make your Social Security claim.
3. Be sure to work for at least 35 years or longer
Finally, you should also make a plan to be in the workforce for at least 35 years. Although you only need 10 years of work credits to qualify for Social Security, your benefit is always based on average wages over the 35 years your earnings were highest.
A career that doesn't span 35 years will lead to a reduced benefit because some years of $0 wages will be part of the calculation. A career lasting longer than 35 years will often lead to a higher benefit, though. If you're earning more late in life then when your benefits are calculated, any extra years of higher wages will replace early years when you made less.
If you're thinking of taking time off in the middle of your career, or if you're in a field where it may be hard to work for 35 years, consider how you'll get the full 35 years in to maximize your benefits by avoiding years of $0 wages. This could mean planning to retire a little later, or make a late-in-life career change.
By taking these three steps, you can get the biggest Social Security check possible, which should pay off big time when your retirement is a more secure one.
