Many people end up relying heavily on Social Security once they retire. And you may end up in a similar situation, even if you've managed to save reasonably well.
If you're not happy with the monthly Social Security benefit you start out collecting in retirement, you should know that there may be steps you can take to boost it. Here are two to look into.
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1. Undo your filing and sign up later
Many people assume that once they claim Social Security, they're stuck with whatever monthly benefit they've locked in for life, not accounting for annual cost-of-living adjustments. But actually, there's a lesser-known Social Security rule that could allow you to boost your benefits on a permanent basis.
Every Social Security recipient is allowed one do-over in their lifetime. What this means is that if you've filed for benefits and decide you want larger checks, you can undo your filing within a year and then submit another application for benefits at a later age.
However, there's a catch. To take advantage of this option, you also have to repay the Social Security Administration (SSA) all of the money it paid you. That could be a tough thing to do if you've already spent most of those funds. So while you should know that the do-over option does exist, it also may not be feasible.
2. Go back to work
There's no issue at all with collecting Social Security and working at the same time once you've reached your full retirement age. And even if you haven't gotten to that age yet, you're still allowed to work and collect benefits. However, you'll need to be mindful of the program's earnings-test limits, since exceeding them could result in having benefits temporarily withheld.
Not only could returning to work help you boost your retirement income, but it could also result in larger Social Security checks. That's because Social Security takes your 35 highest-paid years of income into account when calculating your monthly benefits.
Each year, the SSA reviews the records for all Social Security recipients who work. If your latest year of earnings ends up being one of your 35 highest-earning years, the SSA recalculates your monthly benefits and increases them accordingly. So depending on your earnings from a job in retirement and your previous wage history, you could end up getting more Social Security by virtue of becoming employed.
Plus, you may find that going back to work offers benefits that aren't just financial. Many retirees find themselves both bored and lonely, and many miss the routine of going into an office. If you decide to work part-time, you'll have a reason to get out of the house a few days a week. And you may find that you're able to either expand your social circle or just plain enjoy some day-to-day company.
It's not a given that you're stuck with the same monthly Social Security benefit for life. If you want to see your benefits increase, look into the do-over option and see if returning to a job will result in larger ongoing checks.
