(DailyChive.com) – Social Security offers qualifying people a secure and guaranteed income, helping many to afford their golden years. During its introduction in the 1930s, the sole purpose was to offer a safety net for individuals unable to amass adequate retirement savings. In fact, many people didn’t give much thought to it. But decades later, Social Security would become a primary income source that could help people when they retire.
Social security planning is important to ensure a secure retirement income because you’ll receive a guaranteed income for the rest of your life. The average amount anyone can expect is $1,693 per month. But there are several strategies to max out your social security income by as much as an additional $1,830! Learn whether you qualify for an extra $1,830 in Social Security benefits.
Qualifying for Social Security Benefits
Most jobs deduct money from your paycheck and contribute to the Social Security system so you can receive monthly benefits during retirement. You are eligible to receive these benefits if you are 62 years or older and have worked and contributed Social Security taxes for at least ten years. When claiming your benefits, the amount you receive depends on the averaged indexed monthly earnings during the 35 highest earning years of your career. Therefore, Social Security earnings differ significantly among qualifying individuals. So how can one get the highest possible payout?
Below are strategies to max out your social security income:
Earn More
Paying more into the Social Security system will earn you a larger payout up to a point. Social Security factors the amount you have paid to the system when determining your payment. If you are satisfied with your current employer, you may ask for a pay raise, a promotion, or an increase in your billable hours. You can also switch to another job or start a side hustle.
Some pre-retirees take on part-time work in addition to their full-time gig to increase their income. The bottom line is to ensure proper reporting of any extra income you earn on your taxes so it factors in your Social Security income.
Work Longer
Another strategy to max out your Social Security paycheck is working longer. Social Security factors in the 35 years of your career in which you earned the highest. If you don’t work for 35 years, zeros average into the calculation leading to smaller payments. But if you work for over 35 years, your lowest earning years won’t be part of the calculation, thus a higher payment.
Once you complete your 35-year earnings record, you can add some extra higher earning years to boost your average. But the additional earnings should cause a previous year’s income to drop off the record for them to make a difference in future benefits. Typically, people earn more in the late stages of their careers than at the entry-level. Therefore, if you can earn more to drop some of those earlier years from the math, you will get some extra dollars in your Social Security benefit.
Delay Your Benefit
Another tactic to increase your Social Security payment is delaying your benefit. If you have paid into the system for ten years or more, you can request your benefits at 62 years. But you get a higher amount if you wait for the full retirement age, i.e., 66 or 67 (if you were born in 1960 or later). You can even receive the highest earnings if you delay the benefit until you reach 70 years. But note that delaying beyond age 70 won’t earn you anything extra.
Waiting longer earns you eight percent in delayed credits every year after full retirement age. Let’s say your monthly Social Security earning is $1,000 at full retirement age. You can wait for a full year and claim $1,080.
Max Out Your Social Security Income
If you aim toward getting a higher Social Security income your entire working life, you can consider earning more to maximize your contribution to the system. But even if you have a few years until your retirement, you can boost the payment by working longer or delaying the benefit.
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