(NationRise.com) – Wouldn’t it be wonderful if you could boost your social security benefits another $1,830? In 2023, many beneficiaries of social security get about $1,827 per month. That is an average value which changes per year, largely due to cost of living. While most beneficiaries get something around the average value, it is possible to boost your benefits to get another $1,830!
The best way to get this boost is to put the work in years before retirement. Here’s how it works.
Retirement Benefit Calculation: How Social Security Figures It Out
The Social Security Administration (SSA) calculates your benefits by analyzing your income for 35 years. This number reveals several pieces of information including your primary insurance amount (PIA), which is the amount you get if you claim your benefits. You’ve probably received an annual paper in the mail detailing this information about your retirement.
If you get your benefits before the full age of retirement, the SSA will give you a lower amount, which compensates for you theoretically getting benefits for a longer period of time. However, if you hold out and retire a few years after your full retirement age, the SSA will grant you more.
How to Maximize Your Social Security Retirement Benefits
You can get that extra $1,830 from SSA in one of two ways. One of them involves maximizing your highest income producing years. The second way is to delay receiving benefits. Let’s take a look at both strategies.
Strategy 1: Increase Yearly Earnings
Those who earn more tend to contribute more to SSA, and therefore get higher benefits. Those who make less contribute less and therefore receive less. The SSA calculates the benefits you’ll receive by using your 35 highest earning years.
If you want the extra cash, you should do your best to increase your annual earnings prior to retirement. This is a primary strategy for younger workers, but can also impact mid and late-career decisions, especially when it comes to weighing salary versus other perks of prospective job opportunities.
In 2022, the SSA reported top earners making an average of $147,000 in those top 35 years. That’s a lot to aspire to, but keeping an eye on these yearly averages can give you a sense of where you should be with your salary if you want the extra money in retirement.
Strategy 2: Delay Receipt of Your Social Security Benefits
Currently, the full retirement age (FRA) is set to 66 or 67 years of age. It used to be 65. Those who get benefits before their FRA get less. This is because the SSA assumes they’ll get to enjoy those benefits for a longer amount of time, and will get more value from them.
A delay, however, can make a bit of a difference. If you wait until you’re 70 to receive benefits, you can enjoy a 32 percent increase. This is, however, a bit of a gamble: you’re delaying with the assumption that you’ll remain in good health and will easily use those higher benefits post-70.
Boosting income is obviously easier said than done, but many professionals get a side business or job to increase their income — in addition to their primary source of income. You can consider consulting, online businesses, or even renting out a room in your home. People also tutor, freelance, teach, and walk dogs and pet sit.
If you want to increase income, don’t forget to put your money to work for you with real estate investments, starting a business, and investing in annuities.
Best case scenario? You can increase your income and delay retirement. If your health holds out, you’ll enjoy much more money upon retirement, and will make the most of your money in your golden years.
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