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If you work for just 10 years and pay Social Security taxes, you’re entitled to a Social Security check when you retire. Of course, you’ll need far more than that if you want to be anywhere near the maximum of $3,800 a month if you retire at 70, but you’ll be able to collect something even with only 10 years.
However, if you’re one of the 50% to 70% of Americans who count on Social Security for at least half of your income in retirement, “something” isn’t particularly encouraging. You want to know how much you’ll get—and how to increase that amount as much as possible. After all, the average retiree collects about $1,450 a month from Social Security in 2019, not exactly a living wage.
The good news is unless retirement is just around the corner, you can increase your Social Security check. Here’s what you need to know to get every dollar you’re entitled to when you’re ready to quit your job for good.
With Social Security, Timing Is Everything
If you are entitled to the maximum benefit, you can collect a little over $2,200 a month at age 62, $2,900 a month at full retirement age (66), or $3,800 a month if you wait to file until you’re 70. At first glance, the obvious best choice is to delay benefits until age 70, when your check is almost double your benefit at 62.
But that may not be the best choice for everyone. In the table below, you can see how much money you’ll collect from Social Security based on your age of retirement:
|Age at retirement||Monthly benefit||Total payments at age 75||Total payments at age 80||Total payments at age 90|
If you live to 90 years old, delaying benefits is a no-brainer—you’ll collect almost $200,000 more if you wait until you’re 70 years old to start collecting. But if you only live until you’re 80, you lose money waiting to file your claim.
Finally, if you don’t plan to work until 70 and must cover your living expenses until then by other means, delaying benefits could lead to debt or depleting your savings too soon. Run the numbers using your own financial situation before you decide when to file.
When It Comes To Social Security Benefits, Use Marriage Strategically
If you’re married, you can take advantage of quirks and loopholes in the Social Security program to increase your retirement benefits. If you are married, the lower-earning spouse is entitled to the greater of either his or her benefits based on earnings or 50% of the higher-earning spouse’s amount.
Let’s use the example of a married couple with two separate incomes. First, let’s look at Susan, a part-time substitute teacher who netted a monthly benefit of $1,200 However, her husband Sam’s earnings as a small business owner worked out to $2,800 a month. In this scenario, Susan could collect $200 a month more based on Sam’s Social Security record.
But that’s only part of the story. Social Security allows for a “restricted application,” in which the lower-earning spouse claims benefits against the higher-earning spouse’s Social Security for a certain period before switching to claim benefits against his or her own record at the higher rate.
Here’s how it works: Instead of taking her $1,200 benefit at her full retirement age of 66, Susan files a restricted application and collects 50% of Sam’s benefit until she turns 70. When Susan turns 70, she gets 132% of her full retirement benefit.
Susan’s full benefit on her record was $1,200, but with the 132% increase she gets by waiting to file on her record at 70, her own monthly benefit is now almost $1,600. That’s $400 more than her benefit, and $200 more than her 50% benefit based on Sam’s record. Plus, she’s collected income for several years that she can invest or use to pay off debt before retirement!
How To Maximize Your 35-Year Earnings Record
If you’re married and planning to draw against your higher-earning spouse’s Social Security record, this doesn’t really apply to you. However, if you’re single or the primary breadwinner, maximizing your Social Security record is a big deal.
Your Social Security benefit is based on your average earnings over 35 years. If you work longer than 35 years, your benefit is based on the 35 years with the highest earnings. If you have years with little to no earnings, or you don’t have a full 35 years of work history, your income average will drop significantly.
For example: David worked for 35 years, earning between $30,000 and $125,000 a year. His Social Security benefit was based on an average annual income of $75,000.
Melissa earned over $150,000 a year for 15 years but had no income during the other 20 years. Even though she made a lot more per year than David, her Social Security benefit was based on an average annual income of just $50,000.
You can—and should—request and review your Social Security statement every year to check for errors and track your progress toward the highest possible Social Security check. If anything is inaccurate, get in touch with the SSA right away to correct the record. You don’t want to file a claim based on erroneous information because it’s virtually impossible to fix it once a claim determination is made.
Social Security is your right if you worked and paid taxes, but maximizing your check is up to you. Monitor your annual statement, time your benefits claim and use every advantage to get the money you’re due.