Most financial advisors suggest that when it comes to retirement planning, you should never plan on relying strictly on your Social Security benefits. Still, Social Security income should be an important part of your overall retirement strategy.
Whether you are relying on SSI as your primary source of income once you retire or using it just to supplement your other financial resources, it just makes sense to maximize your SSI benefit amount.
Delay Claiming Social Security Benefits
The simplest way to increase your monthly payments is to delay claiming Social Security benefits. The Social Security Agency allows all Americans to start benefits at the early retirement age of 62 but doing so can reduce your monthly payment paycheck. If you choose to begin receiving Social Security early, for each month, there is between when you start and your full retirement age, you lose about half a percentage point of the total value you would have earned if you’d waited.
According to Eric D. Brotman, CEO of BFG Financial Advisors, there is an 8% annual increase in benefits due for each year you wait from full retirement age through 70. Just don’t wait until after age 70 to start payments.
Work for at Least 35 Years
The Social Security Administration uses your 35 highest-earning years to calculate your primary insurance amount (PIA), which is the monthly benefit amount you receive as of your full retirement age. If you’ve worked fewer than 35 years, Social Security uses zeroes in the calculation for the non-earning years.
That means beneficiaries with fewer than 35 years of income can make a big difference in the size of their benefit by continuing to work and getting some of the zeroes replaced with positive income numbers.
Earn More During Your Working Years
Increasing your income by asking for a raise or earning income from a side job will increase the amount you receive from Social Security in retirement. Earnings of up to $132,900 in 2019 are used to calculate your retirement payments.
Collect Spousal Benefits
Collecting spousal benefits based upon your spouse’s work record is another way to beef up your Social Security benefits. You qualify for spousal benefits in one of two ways: You either lack sufficient work history to claim Social Security benefits on your own, or your spousal benefit would be larger than the benefit you are entitled to. To claim benefits using either method, you must either be at least 62 years of age or have a qualifying child under your care—either a minor child under the age of 16 or any child who is collecting Social Security disability payments. You can expect to receive a benefit of up to 50% of your spouse’s PIA. However, taking your spousal benefit prior to full retirement age means your monthly payment will be reduced. And unlike your spouse’s own benefits, there’s no increase in payment for spousal benefits if you delay past your full retirement age.
Apply for Social Security Survivor Benefits
You may also be able to increase your monthly retirement paycheck using Social Security survivor benefits. If you’re widowed, and your deceased spouse’s benefit was higher than your retirement benefit, you are generally able to claim the higher of the two. Experts recommend higher-earning spouses wait as long as possible to claim benefits since it can prepare a lower-earning spouse for a bigger benefit as a widow or widower. Unlike spousal benefits, which are based on the unadjusted PIA and when the nonworking spouse chooses to start benefits, survivor benefits are determined by the amount the earning spouse actually received if they die after starting benefits.