Planning for retirement is difficult, no doubt about it. The uncertainty of not having any income other than Social Security and savings, which could run out at any time owing to a variety of causes, can be a difficult pill to take, especially for individuals who have spent their entire lives climbing the corporate ladder, if not the salary one.
However, there are certain measures to guarantee that retirement goes smoothly, such as having lots of funds, downsizing your life, particularly your home if you live in a high-cost area, budgeting carefully, using preventative healthcare, and so on.
However, the lesser-known suggestion is that you can actually increase your Social Security benefits beyond what you expect.
The workings of Social Security
We all know how to get our benefits at the conclusion of our working careers: wait until we reach our full retirement age (FRA), which for those born after 1960 is 67 years old, and then claim. Of course, this assumes a number of things, such as that a person has at least ten years of taxable income or that they have worked for at least 35 years and have no “zeroes” in the average used to calculate income.
However, not everyone meets these criteria; some collect benefits on their spouse’s record because they did not work, others worked but had periods of unemployment and are unable to continue working due to external factors, and the majority did not contribute the maximum amount in payroll taxes, resulting in a lower benefit than they would like or need for a comfortable retirement.
To demonstrate this, only two numbers are required: the maximum monthly Social Security payout at FRA was $3,822 in 2024. This same year, the typical Social Security beneficiary will get $1,976 per month. This gap demonstrates that many people do not earn nearly enough in retirement to support themselves and their lifestyle, and there comes a time when no amount of shrinking will make the budget work.
Waiting until age 70 to claim benefits is the single most effective way for anyone to improve their retirement income. Every month you delay your Social Security claim beyond FRA, your monthly benefit increases by 2/3 of 1% until you achieve the maximum benefit at age 70. When you reach the age of 70, your benefits will no longer be accumulated and will begin immediately.
Those who can afford to delay their claim will have one more chance to raise their benefits, and if they continue to work, they will not have to worry about making ends meet.
Simply do the math: if FRA is 66 and 10 months, an individual can increase their monthly payment by 25.33% by filing at 70. If they are eligible to a monthly benefit of $4,018 this year and wait their claim until they reach the age of 70, they can increase their monthly Social Security check to $5,036.
This will, of course, be easier for the already high earners, as they will be able to postpone retirement even if they cease working, and the chances are they will have enough resources to bridge the gap or an alternative to their present high-stress job, such as part-time consulting or gig work. That will make it simpler for them to wait than for typical workers, who may have bills to pay and insufficient funds to support them.
Regardless, even waiting one or two years will increase your benefits, so wait as long as possible before collecting benefits.
Also See:- Problems with Retiree Wages Starting in 2025 – 20% Less in Social Security Benefits