newsfeedback@fool.com (Maurie Backman) May 25, 2019
Social Security is a key income source for
millions of seniors today, and while it certainly shouldn't be your only means
of paying the bills in retirement, the more money you're able to get from it,
the better. The good news? There are steps you can take to score a higher
retirement benefit. Here are a few to focus on at various stages of life.
1. Boost your skills to grow your earnings
The more money you make at your job, the
higher your Social Security benefits stand to be. That's because those benefits
are calculated based on your 35 highest-paid years of earnings. It pays to
invest in growing your skills, because the more value you bring to your
employer, the more likely your salary is to go up. You can boost your skills in
a number of ways, whether it's taking classes, getting a professional certification,
or even shadowing seasoned colleagues and picking up on the things they do
best. Boosting your earnings by even a small amount could have a tremendous
lifetime impact, since future raises will be based on a higher starting number.
2. Work a few extra years once your salary peaks
Many people start out with lower salaries and
earn more as they advance in their careers. If your salary ends up peaking in
your 60s, working a few more years than planned could boost your Social
Security income if you're able to replace lower earnings on record with higher
earnings. Similarly, if you took time off during your career and don't have a
full 35 years of earnings under your belt, you'll have $0 factored in for each
year without a salary. Replacing even a single $0 entry with an actual income
figure will help you snag a higher monthly retirement benefit.
3. Delay benefits as long as possible
You're allowed to file for Social Security as
early as age 62, but you have the option to wait all the way until age 70 to
sign up (technically, you can wait even longer, but there's no point). Waiting
until full retirement age,
however, will ensure that you get the full monthly benefit your earnings record
renders you eligible for. Full retirement age is either 66, 67, or somewhere in
between, depending on the year you were born. Furthermore, if you delay
benefits past full retirement age, you'll accrue credits that
increase those payments by 8% a year. That can happen up until you turn 70, at
which point that incentive runs out.
Imagine your earnings record entitles you to a
monthly benefit of $1,600 at a full retirement age of 66. If you sit tight and
wait until 70 to claim benefits, you'll wind up getting $2,112 a month instead
-- for life.
4. Check your earnings statements
Every year, workers get an earnings statement
from the Social Security Administration (SSA) summarizing their income and
estimating their retirement benefits. If you're 60 or older, this statement
should arrive in the mail, and if not, it's available on the SSA's website once
you create your own account to access it. Reviewing your statements for errors
could result in a higher monthly benefit if you spot a mistake that works
against you.
For example, imagine the SSA has $40,000 of
income on record for you in a year when you earned $60,000. That error could
impact your benefit calculation if you don't correct it. Therefore, be sure to
review your earnings statements thoroughly, and report mistakes to the SSA
right away if you come across any.
Chances are, you'll depend on Social Security
to some degree in retirement. Making an effort to boost your benefits could
really pay off, not to mention save you a world of financial stress during your
golden years.
https://www.stltoday.com/business/investment/personal-finance/ways-to-score-higher-social-security-benefits/article_d3b9b590-8547-511d-afcd-ef74ea68d77d.html
No comments:
Post a Comment