You contributed (and may still contribute) to Social Security through your payroll or self-employment taxes while working. This entitles you to a certain benefit. Uninformed people are not aware that they are accepting less than they should from the Social Security Administration (SSA).
Are you taking these steps to increase your benefits?
1. Work Enough Years
SSA will look at your 35 highest-earning years. If fewer than 35 years, each no-work year will be a $0 in that average.
Many don’t know that even if you’ve already started receiving benefits, you can still work up to a limit. If your annual earned income after retirement is one of your highest 35 years, or if you’re taking your spouse’s benefit because you didn’t have enough years worked, your payment can actually go up.
2. Work to Full Retirement
The age of full retirement varies depending on when you were born. You are allowed to start collecting before the full retirement age. But this reduces your payments for life by as much as 25% to 30%.
3. Have a Plan for “Early Retirement”
Depending on your career, working to full retirement may be hard. So create a Plan B, a job you could slide into in your 60s if something forced you into “early retirement”.
4. Claim Your Spousal Benefits
SSA recognizes that sometimes spouses split responsibilities unevenly as partners with one making most of the money. If you are a spouse who makes less money, you may qualify for up to 50% of your partner’s benefits while they are living. You must be at least 62 (in 2022) to qualify for a spousal benefit, however benefits are reduced when taken prior to full retirement age.
5. See If You Qualify for Dependent Benefits
If you have retired but have a dependent under 19YO, the dependent may qualify for up to 50% of your benefit. This would be added on top of the benefit you already claim.
6. Keep a Side Job But Track Your Earnings
Once you start claiming Social Security, you can still earn some income without it impacting benefits. In fact, this is one way many people can “increase” their Social Security. If you’re in relatively good health, you have lots of options. Further, continuing to work can be great for your mental and physical health.
With that said, you must track how much you’re making. Don’t go over the limit or it will reduce your benefit.
With that said, the limit is generous.
In 2022, you can earn up to $19,560/yr if you are in early and $51,960/yr if you have passed the full retirement age.
Wondering what kind of job you could do? According to US News and World Reports, some of the top jobs “retirees” take on are:
- Teacher/Tutor/Teacher’s Aide
- Administrative assistant
- Health and personal care aides
- Real estate agent
- Sales
- Driver
- Childcare and special needs adult care
- Consultant based on the career you retired from
Most of these offer you some flexibility in how much you earn and allow you to work part-time or part of the year. Many retirees do.
7. Be Aware of Tax Brackets
Barely entering a higher tax bracket will mean bringing home less money. So know where the next bracket is.
8. Check on Survivor Benefits
If your spouse or ex-spouse has passed and had higher benefits than you, you may qualify to receive their benefit instead of your lower one.
As a side note, if your spouse is living and thinking of voluntarily taking early retirement, you two may need to factor it into your retirement plan.
9. Know Your Rights
You have the right to dispute your Social Security statement if it doesn’t accurately reflect your earnings. Check those numbers each year. It’s best not to wait. You may no longer have supporting documentation if you do. You can create an account at SSA.gov to see your income history.
You also have the right to suspend your benefits. If you feel you made a mistake in taking early retirement, you can pay that money back, suspend benefits, and start collecting after full retirement age. However, you must do this within one year of starting benefits.
Bottom Line
You paid into a system and deserve to get what you’re entitled to. Take these steps to increase your benefits.