You’ll often hear that Social Security should not be your primary sourcE of income during retirement. That’s because those benefits will only replace about 40% of your wages if you earn an average income, and most seniors need to replace around 70% to 80% of their former earnings to live comfortably.
But even if you have a nice, robust nest egg on top of Social Security, it could still pay to boost those benefits as much as possible. The higher a monthly benefit you lock in, the more financial stability you can buy yourself throughout your senior years. With that in mind, here are three steps you can take to score a more generous benefit.
1. Boost your earnings while you’re still working
The monthly benefit you’re entitled to from Social Security will hinge on how much you earn during your 35 highest-paid years in the labor force — so if you’re able to boost your income, you stand to collect a higher benefit down the line.
How do you boost your income? Improving your job skills is one option, but you can also pick up a side gig and grow your earnings that way. As long as you report that side income to the IRS — which you’re required to do anyway — it should count toward calculating your future monthly benefit.
2. Delay your filing as long as possible
Age 70 is by no means the most popular age to sign up for Social Security. But there’s a reason it pays to wait until then.
You’re entitled to your full monthly Social Security benefit based on your wage history once you reach full retirement age, or FRA. FRA is either 66, 67, or somewhere in between, depending on when you were born.
For each year you hold off on filing for Social Security past FRA, your monthly benefit gets an 8% boost — and to be clear, that’s a permanent boost we’re talking about. And so if you’re able to sit tight until age 70, which is when that incentive runs out, you could end up increasing your monthly benefit quite nicely.
3. Undo an early filing
Though claiming at age 70 is hardly favored, age 62 is an age when seniors tend to sign up for benefits. That’s because it’s the earliest age you’re allowed to do so.
The problem, though, is that claiming benefits ahead of FRA will result in a lifelong reduction. And if you have an FRA of 67 but you sign up for Social Security at age 62, you’ll slash your monthly benefit by 30%.
If that’s a scenario you wind up in, though, not all is lost. That’s because Social Security gives you one opportunity in your lifetime to undo your filing and claim benefits again at a later age.
To undo your filing, you won’t just simply withdraw your application for benefits. You’ll also need to repay all of the benefits you’ve received to date. But if you’re able to do that, you can claim Social Security later in life — and snag a higher monthly benefit as a result.
No matter how much money in savings you bring into retirement, it never hurts to raise your Social Security benefit as much as you can. These moves could be your ticket to a higher benefit — and more financial peace of mind for the rest of your life.