Whether Social Security ends up representing the bulk of your retirement income or just a portion of it, it’s important to get as much out of the program as you can. And if you expect your benefits to cover most of your living costs, then it pays to adopt these effective strategies.
1. Raise your benefits by earning money in less conventional ways
Your Social Security benefits are calculated based on the amount of money you earn during your 35 highest-paid years in the workforce. Many people therefore assume that they’ll need to continuously snag raises at work in order to boost their benefits down the line. But there’s another strategy you can try as well.
These days, side hustles are all the rage. Whether it’s pet-sitting on weekends, doing graphic design a few evenings a week, or moonlighting as a driver for a ride-hailing service, there’s plenty of opportunity to earn some money on top of what your main job pays you. And the cash you earn from your side gig counts toward calculating your eventual Social Security benefit.
2. Delay your filing as long as you can
Social Security benefits are based on earnings. But the age at which you sign up for benefits will also dictate how much money you wind up collecting.
You’re entitled to your full monthly benefit based on your income history once you reach full retirement age. That age isn’t the same for everyone — it’s either 66, 67, or somewhere in between, depending on your year of birth.
The Social Security Administration will allow you to delay your filing beyond full retirement age if you don’t need your benefits right away. For each year you hold off on claiming benefits, they’ll grow 8%.
Once you turn 70, you can no longer accumulate the delayed retirement credits that cause benefits to grow. But what this does mean is that if your full retirement age is 67 and you hold off on filing until age 70, you’ll raise your benefits by 24%. And that’s a permanent boost we’re talking about.
3. Coordinate with your spouse if you’re each in line for a monthly benefit
In some couples, only one member is entitled to a Social Security benefit and the other is limited to a spousal benefit. But if you’re in a situation where both you and your spouse are eligible for benefits based on your respective earnings histories, then you have a real opportunity to file strategically.
In this scenario, it could make sense to have the lower-earning spouse file for benefits at full retirement age or even a bit earlier. That way, you get some money coming in from Social Security that you can use to cover expenses.
At the same time, the higher earner can delay filing as long as possible. As we just learned, that will result in a higher monthly benefit for life that can be shared. Just as importantly, if the lower earner is expected to outlive the higher earner, having the higher earner delay Social Security could leave the lower earner with a more generous survivors benefit.
Ideally, Social Security won’t bankroll your retirement by itself. Retirement can be an expensive period of life, and it’s a good idea to have some savings to supplement your Social Security income. But either way, these strategies could help you get more out of your benefits — and help ensure that you have enough money for a comfortable lifestyle.