That's why it's important to get as much money out of Social Security as you can. And these strategies could be your ticket to a higher payday.
1. Boost your income
Your Social Security benefits are calculated based on your personal wage history – specifically, the wages you earn during your 35 most profitable years in the labor force. As such, the more money you make, the higher a benefit you stand to collect.
When you take on a side gig -- things like driving for a ride-hailing service or designing websites from home -- you're supposed to pay taxes on that income. And while that may be a bummer, the good news is your side income will count for Social Security purposes, which could lead to a higher benefit for you down the line.
2. Delay your filing as long as possible
You're entitled to your full monthly benefit based on your earnings history once you reach full retirement age (FRA). FRA is based on your year of birth, as follows:
Year of birth and full retirement age (Data source: Social Security Administration)
- 1943-1954 - Age 66
- 1955 - Age 66 and 2 months
- 1956 - Age 66 and 4 months
- 1957 - Age 66 and 6 months
- 1958 - Age 66 and 8 months
- 1959 - Age 66 and 10 months
- 1960 or late - Age 67
However, you're allowed to delay your filing beyond FRA, and if you do, you'll be rewarded in the form of a higher benefit. In fact, if your FRA is 67 but you hold off on claiming Social Security until the age of 70, your benefits will get a 24% boost. That boost will then remain in effect for the rest of your life.
3. Sync up with your spouse
Spouses who are each entitled to a Social Security benefit have an advantage over single claimants, and it's the ability to coordinate their filings. One strategy you might employ if you're in this boat is having the lower earner of the two of you file for benefits at FRA. That way, as a couple, you get some money coming in.
What you can then do is have the higher earner delay benefits until the age of 70 (which, to be clear, is when the delayed retirement credits that boost your benefits stop accruing). That way, that higher benefit gets a generous boost that leaves you both with more money to look forward to.
This option is especially smart if the higher earner of the two of you is also considerably older and therefore more likely to pass away sooner. That way, the lower earner gets left with a higher survivors benefit.
Whether you rely on Social Security to pay the bulk of your retirement expenses or a portion of them, the right moves on your part could leave you with more money to enjoy as a senior. It pays to employ these tactics so you get the most out of Social Security -- and so you're able to enjoy your senior years to the fullest.
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