Author and speaker Zig Ziglar reportedly once joked, “If you want to earn more, learn more.” That is usually true for our careers, as adding certifications or degrees or skills to our resume can make us more marketable. It is also true for many things, including Social Security.
The more you know about Social Security, the better chance you have of leaving the program. Here, for example, there are 10 ways to increase your benefit checks:
- Check your Social Security work record for errors
- Work for more years: at least 35
- Improve your earnings record
- Wait until age 70 to start collecting benefits
- Start collecting benefits from age 62
- Take advantage of marital benefits
- Consider delaying your divorce
- Do not earn too much while collecting benefits
- See if you qualify for survivor or disability benefits
- Be strategic, especially with your spouse
Let’s look at each of these more closely.
1. Check your Social Security work record for errors
Let’s start at the source. The Social Security Administration (SSA) keeps records of our earnings and uses their formulas to determine our possible benefits. However, if your earnings record is incorrect, you could end up receiving less than what you are entitled to. Go to my Social Security page on the SSA.gov website and create an account. Then you can see the SSA record of your earnings history. If you find errors, contact SSA to fix them. Your account there will also allow you to view estimates of your future benefits, which can assist you in your retirement planning.
Image source: Getty Images.
2. Work for more years – at least 35
The formula SSA uses to calculate your benefits is based on your earnings in the 35 years you earned the most, of course, adjusted for inflation. So if you are on your way to working for only 28 years and then retire, know that SSA will insert seven zeros in the formula, giving you lesser benefits. If you can work a few more years, you can significantly increase your benefits.
3. Improve your earnings record
If you can increase your earnings record, you can get bigger benefit checks. You can aim to earn more in the years to come by changing jobs or careers or simply climbing the ladder more quickly, perhaps adding more certifications or skills, to make yourself more valuable. Also, once you’ve worked for 35 years, if you’re earning much more than you used to adjust for inflation, you could work a few more years, because that will allow you to replace some low-income years. with some earning more.
4. Wait until age 70 to start collecting benefits
Procrastination is generally not a good thing, but if you can postpone starting to collect your Social Security benefits, you can increase them. Each of us has a “full retirement age” at which we are entitled to receive the full benefits we have earned based on our work history. For most of us, it’s 66 or 67. For every year past that age it takes you to start collecting, your benefits increase by about 8%. Therefore, delaying from 67 to 70 will get checks that are 24% larger. There are no more increases after age 70, so you better start harvesting at that time.
The following table shows how much bigger (or smaller) your Social Security benefit checks will be depending on when you start collecting:
|
Start collecting at: |
Retirement full age 66 |
Full retirement of 67 years |
|---|---|---|
|
62 |
75% |
70% |
|
63 |
80% |
75% |
|
64 |
86.7% |
80% |
|
Sixty-five |
93.3% |
86.7% |
|
66 |
100% |
93.3% |
|
67 |
108% |
100% |
|
68 |
116% |
108% |
|
69 |
124% |
116% |
|
70 |
132% |
124% |
Source: Social Security Administration.
5. Start collecting benefits from age 62
The table above shows how much smaller your checks will be if you start cashing early, and you can start cashing regular retirement benefits starting at age 62. It may seem silly to start early and get smaller checks, but remember:
- Could you just need early admission, perhaps due to an unexpected job loss.
- While the checks will be smaller, there will be many more.
- The system is designed for those who live medium-term lives to get roughly the same total benefits no matter when they start charging.
If you think you have a decent chance of living a shorter than average life due to health problems or a family history, it may make sense to start collecting early, so you will get more benefits from the program.
6. Take advantage of marital benefits
You may assume that you are out of luck with Social Security benefits if you do not have a sufficient work history to qualify for benefits, perhaps because you were a homemaker for most of your life. Well, comply with the “spousal benefit”. Social Security rules allow you to collect a benefit based on your spouse’s earnings record. You can receive up to 50% of your spouse’s benefits.
7. Consider delaying your divorce.
Speaking of spouses, you can even collect benefits based on your former spouse’s earnings record, as long as you meet the requirements of the rules. For example, you must have been married for at least 10 years. So if you plan to divorce your spouse and have been married for, say, nine years, and if your future ex-spouse has a significantly higher earnings history than you do, consider delaying the divorce for another year, if that seems like something you can do. . (It won’t make sense to some people, but it does to others.) For some people, this is a good way to cash larger benefit checks.
8. Don’t earn too much while collecting benefits
Then know that if you work and earn more than a certain amount while receiving Social Security benefits, some of those benefit dollars will be withheld. According to the Social Security Administration:
If you are below full retirement age throughout 2020, we must deduct $ 1 from your benefits for every $ 2 you earn above $ 18,240. If you reach full retirement age during 2020, we must deduct $ 1 from your benefits for every $ 3 you earn above $ 48,600 until the month you reach full retirement age.
However, it is not as bad as it sounds, as the dollars withheld are factored into your future earnings, increasing accordingly.
9. See if you qualify for survivor or disability benefits
Not only are there Social Security benefits for spouses and ex-spouses, but there are also benefits for disabled and survivors. Disability benefits are available to people of all ages who qualify through two programs: Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI), which differ in who they are intended to help and what they offer. In the meantime, if your spouse dies after working enough to qualify for Social Security benefits, you, and possibly your children as well (up to age 17), may collect survivor benefits based on the deceased’s income history .
10. Be strategic, especially with your spouse
Some of the ideas above involve strategies, such as working harder to strengthen your earnings record and deciding when to start collecting benefits. But a little more research and learning about Social Security can provide even more ways to increase your benefits.
Coordinating with your spouse is a good example: If your spouse has a much stronger earnings history than you, he or she could try to delay the start of your collection until age 70 to maximize the size of the checks, while claiming your benefits. ahead of time or on time, just to start earning more income for your home. This can be an effective strategy because if your spouse dies before you, you can cash your own benefit checks or yours, whichever is larger, and your spouse’s checks will have accumulated as much as possible.
The more you know about Social Security, the more you can leave the program. Remember: the more you learn, the more you earn.
