You are probably relying on Social Security to at least help cover your elderly living expenses. To this end, it is advantageous to guarantee the highest possible monthly benefit. Here are three easy ways to do this.
1. Boost your income with parallel work
Some people assume that Social Security benefits are universal and that all older people receive the same amount each month. But in fact, your monthly benefit will be based on the amount of money you’ve earned in your top 35 paid years in the workforce. And if you want a higher benefit in retirement, the answer is simple: increase your income.
You can guarantee yourself an increase in your income by getting a side job in addition to your main job, and these days the gig economy is full of opportunities. While things may be a bit tighter right now due to the pandemic, over time they are expected to reopen. Not only will your secondary income count towards your saved salary, it will also give you more flexibility to fund a retirement savings plan, which will also help you get more income in your senior years.
2. Delay your deposit as long as possible
You are entitled to your full monthly Social Security benefits based on your income history once you reach full retirement age, or FRA. That age is 66, 67, or somewhere in between, depending on when you were born.
However, you are not required to claim benefits from your specific FRA. You can file an earlier claim – as early as 62 – for a reduced benefit, or you can delay your declaration beyond the FRA and give your benefits an 8% increase for each year you make. Any boost you get for your benefits will stay in effect throughout your retirement.
3. Correct errors on your annual income statements
Each year, the Social Security Administration (SSA) draws up an income tax return that summarizes your annual salary and assesses your future retirement benefits. But if the information in this declaration is incorrect, it could lead to you ending up with a lower benefit than you are entitled to.
Suppose you made $ 110,000 last year, but you changed employers halfway through and one of your employers failed to report your income. In this case, you could end up with only $ 60,000 of income on file for the year when in reality you took a lot more. This is why it is essential to review your income statement every year. Correcting mistakes that are hurting you can result in increased pension benefits.
If you are 60 years of age or over, you will automatically receive your income statement by mail. Otherwise, you can access yours through the SSA website.
Hang that superior advantage
The money you save for retirement in an IRA or 401 (k) plan could run out on you during your senior years. Social Security, on the other hand, is guaranteed to give you a monthly benefit for life, so the higher your salary, the more financial security you will have, no matter how long you retire.