If you’re in your late 30s or 40s, you have plenty of time to increase your future Social Security checks. And it’s never too early to start. These three strategies can help you collect Social Security and receive a larger check when you retire.
Important points
Delay receiving your Social Security check until age 70, but there’s no reason to wait any longer.
1. Earn a high salary
Earning a higher salary is one of the easiest ways to increase your Social Security check. The more you earn, the more Social Security benefits you’ll receive when you move on. So be as strategic as possible in your 30s and 40s and increase your salary each time you move up the career ladder.
Be your own best advocate by asking for a raise. However, be sure to present a well-prepared case with concrete data that shows your contribution to the company and how it compares to the market. If you can secure a raise or a higher-paying job, you will be subject to more Social Security checks as a result.
Peak earning potential occurs between ages 35 and 64, so the more money you earn during this period, the more you’ll receive in retirement.
2. Earn that salary for as long as possible
The Social Security Administration only counts part of your career in its calculations. Only the 35 years in which you earned the most are considered when calculating your retirement check. If you haven’t worked for 35 years, it counts as an O in the calculation.
“It’s important to note that Social Security is based on your 35 years of highest earnings, so if you’re checking your statement now, you may be aware that your benefits may be lower than they actually are. Be careful: Most people reach a period of high income late in their working lives, says Jarrod Sandra, a certified financial planner and owner of Chisholm Wealth Management.
3. Delay collecting Social Security until age 70
If you want to get the most out of your Social Security benefits, hold off on collecting Social Security until age 70. If you wait, your Social Security retirement check will increase to the maximum amount. There is no incentive to wait until after age 70.
“As a general rule, you should wait until age 70 to claim Social Security because you get an 8% increase for every year you delay. We guarantee a return of 8%,” says Sandra. This 8% applies if you were born after 1943. The proportion of people born earlier in the year varies.
Waiting to collect Social Security means you need to set aside additional money for retirement. This may include enrolling in your employer’s retirement plan, opening an Individual Retirement Account (IRA), or investing in other vehicles such as real estate.
conclusion
To increase your Social Security check, earn the highest salary you can now and keep earning it for as long as possible. Another way to increase your Social Security check is to delay collection until age 70. There is no reason to wait until age 70 or later. The more your income increases, the larger your Social Security check will be.
