Tips for Maximizing Social Security to Boost Retirement Funds
- Author: Lorraine Blanda
- Posted: 2024-08-04
Here are a few tips to help you to maximize your social security benefits as you approach this season in life.
Work a Minimum of 35 Years
The best first step to take when you are younger to top off your social security benefits is to work a minimum of 35 years. These payments are determined using the 35 highest-earning years that you spend in the workforce. This means that your payments will be significantly lower if you do not work for 35 years. Additionally, working for over 35 years will drop your lowest earning years from being included in the calculations. This is particularly important as most workers tend to earn more later in life when compared to those years just getting started in the workforce.
Earn More Money
This goes without saying but earning more money is also a surefire way to increase these benefits later down the road. Your retirement benefits will naturally be higher if you pay more money into the fund during the working years. The best strategy is to at least earn the maximum taxable amount each year. This is important even if it means that you need to take on a side hustle to hit this benchmark.
Delay Claiming Benefits
Many new retirees also make the wise decision to delay claiming their social security benefits until they are 70. Delaying these payments will give you additional retirement credits that will increase the monthly benefit by 8% for every year. There is no extra incentive to delay once you reach the magic age of 70. Be sure to look into the specifics of this strategy as it varies based on your current age. For instance, younger workers under the classification of a full retirement age of 67 can only receive three years of delayed credits while older workers see slightly more.
Suspend Payments
You are still eligible to increase your social security payments even if financial circumstances forced you to take a reduced benefit at an earlier age. Beneficiaries who have not reached age 70 can decide to suspend these payments in an effort to earn more credits down the road. This is a good strategy if you will fall within this age range and are able to get by without the payments until you are 70 years old.
Leverage Spousal Benefits
Under the current rules, married individuals are provided with up to 50% of their spouse's eligible social security benefits if that number is greater than their individual payment. In order to receive the full 50%, you will need to register for these spousal payments at your own full retirement age. Like other benefits, these spousal payments are lower if you decide to claim them prior to reaching the full retirement age. In addition, divorced individuals are also eligible to receive spousal payments as long as the marriage lasted 10 years or more.
Qualifying for Benefits for Children or Widows and Widowers
If you are a widow or widower, you are also eligible to receive the social security benefits of your deceased spouse. Children of a deceased worker may also be eligible to receive some of this money. This benefit also applies to adult children with severe disabilities. There is a maximum amount allotted for each family that you will want to take into account.
Do not leave money on the table during your retirement years. Being mindful of how to maximize future social security payments is an important consideration for your financial future. It is never too early or too late to begin thinking about how to get the most out of this crucial benefit.