As the cost of living continues to rise, many Social Security beneficiaries are looking for ways to maximize their retirement benefits. By strategically planning and taking certain steps, you could increase your monthly payments and potentially receive up to $5,108 in 2025. Here are five effective strategies to boost your Social Security retirement benefits.
1. Delay Claiming Until Full Retirement Age or Beyond
One of the most powerful ways to increase your Social Security retirement benefit is to delay claiming until you reach your Full Retirement Age (FRA) or even beyond. The FRA is typically between 66 and 67, depending on your birth year. By waiting until your FRA or longer, you can earn “delayed retirement credits” that increase your monthly benefit.
If you delay claiming benefits past your FRA, your payments will increase by approximately 8% per year until you turn 70. For example, if your FRA is 66 and you wait until 70 to claim, your benefits could increase by up to 32%. This is one of the best ways to maximize your Social Security income.
2. Work Longer and Earn More
The Social Security Administration calculates your benefit based on your highest-earning 35 years of work. If you have fewer than 35 years of work history, zeros are factored into the calculation, which could lower your benefit. By working longer and earning more, you can replace these zero-income years with higher-earning years.
Additionally, if your income increases in your later years, the SSA will recalculate your benefits based on your highest-earning years. This can significantly raise your monthly benefit. Aim to maximize your earnings in your final years of work to boost your retirement benefits.
3. Maximize Your Earnings Before Retiring
Your Social Security retirement benefit is based on your 35 highest-earning years, so it’s important to earn as much as possible in the years leading up to retirement. By increasing your income before retirement, you increase your benefit base. This means that higher-paying jobs, taking on additional work, or earning promotions could have a significant impact on your monthly benefit once you begin drawing Social Security.
Keep in mind that Social Security taxes are applied to earnings up to a certain threshold each year. In 2024, the Social Security tax applies to earnings up to $160,200. If you earn more than that, any additional earnings won’t count toward your Social Security benefit calculation.
4. Consider Spousal Benefits
If you are married, you may be eligible for spousal benefits, which can increase your total Social Security retirement income. If your spouse has a higher benefit than you, you may be able to claim a spousal benefit worth up to 50% of your spouse’s benefit at their Full Retirement Age.
This option is particularly helpful for individuals who didn’t earn a significant income during their working years or have lower lifetime earnings. Additionally, if you are widowed, you may be eligible for survivor benefits, which can also boost your Social Security payments.
5. Reduce Your Taxes on Social Security Benefits
While this strategy won’t directly increase your benefit amount, minimizing the taxes on your Social Security benefits can effectively increase the amount you receive each month. Social Security benefits are subject to federal income taxes if your combined income exceeds certain thresholds. By managing your income in retirement (for example, by withdrawing funds from tax-deferred accounts in a way that reduces your taxable income), you can reduce the amount of taxes owed on your Social Security benefits and keep more of the money you receive.
Work with a financial advisor to develop a strategy for managing your income in retirement to reduce taxes and preserve more of your Social Security payments.
Conclusion
By taking these steps to boost your Social Security retirement benefits, you can increase your monthly payments and ensure a more financially secure retirement. Whether it’s by delaying your claim, working longer, earning more, or optimizing your spousal benefits, these strategies can help you maximize the amount you receive. With careful planning, you could see your Social Security payments reach up to $5,108 or more in 2025.
For more information on Social Security and how to maximize your benefits, visit the SSA.gov.
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