Social Security is an essential source of income for American seniors. About half of households with someone age 65 or older receive the majority of their income from the government program, according to multiple studies reviewed by the Social Security Administration. At the same time, many seniors feel the spending power of their Social Security checks is going down, despite the annual cost-of-living adjustments (COLAs) they receive.
The good news is that your Social Security benefits aren't set in stone, even if you've already started collecting your monthly check. There are multiple ways you could give your benefits a boost. Here are three things to consider if you want to see a bigger check from the government.
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1. Continue working in your 60s and beyond
Many seniors opt to continue working or go back to work even after claiming Social Security, for financial reasons or the potential mental and physical health benefits of working at least part time (or both). In fact, working in your 60s and beyond is one of the best ways to increase your Social Security benefit.
When the government calculates your Social Security benefit, it looks at your entire earnings history. It selects the 35 highest-earning years, adjusted for inflation, and bases its benefits calculation on the average earnings over those years.
One key detail in that calculation is that the inflation adjustment is tied to a wage index from the year you turn 60. That means you won't see an increase in your average earnings if you stop working at age 60.
Importantly, any earnings after age 60 also don't get adjusted (up or down). But since wages typically keep up with inflation, it becomes more and more likely that you'll replace some lower-earning years from your 20s or 30s with wages earned in your 60s or 70s if you opt to continue working.
The Social Security Administration will recalculate your average earnings every year and change your monthly benefit as a result. If you earn enough to replace one of your 35 highest-earning years with a new amount, you'll see a bigger benefits check.
There's a big caveat to be aware of. If you're collecting Social Security but haven't reached your full retirement age, you'll be subject to the retirement earnings test. If you earn over a certain threshold, you'll see a reduction in your benefits. Those benefits aren't lost for good, though. The Social Security Administration will adjust your benefits upward once you reach full retirement age to account for the foregone benefits in your early 60s. In other words, you'll get an even bigger benefits check in the long run.
2. Suspend your benefits
If you're between full retirement age and 70 years old, you have the option to suspend your Social Security benefits.
When you suspend benefits, you stop receiving a monthly check from the government. Instead, the Social Security Administration will adjust your benefit upward by 2/3 of a percentage point for each month you keep your benefits suspended. The result could be a benefit that's up to 26.7% higher, even before accounting for the annual COLA that continues accruing while you wait to resume benefits.
Suspending benefits is a great option for anyone who claimed Social Security early, but is now in a position where they could forego benefits for a few months or even a few years. The effect could be substantial when you account for the increase in benefits paid out over the rest of your life. If you're in good health and can reasonably expect to live a long life, suspending benefits might make sense for you.
There's a big drawback to suspending benefits for some. Anyone collecting Social Security benefits based on your earnings record will also stop receiving those benefits. A minor child, for example, might no longer be eligible for benefits. A spouse collecting spousal benefits will go back to receiving benefits based on their own earnings record (if eligible). Keep that in mind when considering suspending benefits.
3. Switch to another benefit
Social Security includes benefits for spouses, ex-spouses, and widow(er)s. Switching from a personal benefit to one of those spousal benefits (or, in some cases, vice versa) could result in a bump in your monthly check.
Spouses are eligible for up to half of their partner's primary insurance amount. That's the amount they'd receive if they started Social Security in the month they reach full retirement age. The amount is adjusted downward based on when you claim benefits (not on when your spouse claims).
The key for spousal benefits is that your spouse must also actively collect benefits for you to be eligible. So, if you collect benefits based on your own earnings record, you'll have an opportunity to switch to a bigger spousal benefit only once your partner starts collecting benefits on their own. Note that ex-spouses aren't subject to this requirement, as long as they've been divorced at least two years.
Survivor benefits allow a widow or widower to collect the higher benefit between theirs and their spouses. Ex-spouses who were married at least 10 years may be eligible, as long as they don't remarry before age 60. If you switch from your own benefit to a survivor benefit, you'll see a step up in your monthly check.
Young widow(er)s have an opportunity to take advantage of survivor benefits rules. You can claim your personal benefit early and then switch to your survivor benefit once it maxes out in value at full retirement age. In some instances, it might make more sense to claim your survivor benefit as soon as possible and wait for your personal benefit to max out at age 70. Either way, it's a strategy that can provide a big boost to your lifetime benefits.
Be sure to explore all the benefits available to you, and switch if and when it makes sense.
