3 things to do to maximize your social security checks
WWhat about more Social Security money to help fund your retirement? There are three steps you can take that can help you get there – some of which you will need to start working on early in life.
Here is what they are.
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1. Maximize your income
The average earnings over your career are the biggest determining factor in the size of your Social Security checks. If you want to gain a bigger advantage, you must take every opportunity to increase your income.
For most people, it starts with improving job skills and not just looking for promotion opportunities or applying for new jobs looking for higher pay and more responsibilities. .
It’s also crucial to advocate for your interests with your employer, as those who don’t negotiate their wages or advocate for steady increases can find themselves making tens of thousands of dollars less over their lifetimes. In fact, studies have shown that not negotiating your salary in your early years could cost you over a million dollars in lifetime earnings over the course of your career.
Since Social Security benefits replace about 40% of pre-retirement pay, you’ll end up with thousands of dollars less per year if your pay is lower because you haven’t made the effort to maximize your income.
2. Work at least 35 years
You must work for at least 10 years to become eligible for Social Security benefits on your own employment history, although you can apply for spousal or survivor benefits without working at all. But if you don’t work for at least 35 years, you will reduce the size of your checks.
The calculation of average social security income takes into account your 35 most paid years. If you don’t have a work history spanning that period, the $ 0 will be part of your average and you’ll end up with a much lower monthly benefit.
Chances are, if you worked exactly 35 years, you will also have included a few years where your wages were quite low. This can happen when you are starting your career or if you are unemployed for part of the year. Those low-income years lower your average, but you could replace them if you’ve worked more than 35 years later in life when your pay is higher.
3. Wait until age 70 to claim benefits
Finally, if you want the maximum possible benefits each month, you will need to be a late filer.
Although you become eligible to claim Social Security checks at age 62, the maximum benefit is available for people who wait until age 70. By delaying, you will both avoid early reporting penalties and earn the maximum amount of deferred retirement credits.
See, Social Security tries to equalize lifetime benefits between early and late filers. Those who apply for benefits before full retirement age (FRA) receive lower checks due to early reporting penalties. Those who apply to a designated FRA receive their standard benefit based on average salary. And retirees who wait to age 70 see their standard benefit increase by earning deferred retirement credits available up to age 70.
Of course, you can decide that you’d rather retire early or don’t want to spend 35 years working on it – and that’s okay. Just know that if you don’t follow these three steps, your monthly Social Security check will be lower than it would have been otherwise.
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