6 Ways to Improve Your Social Security Before Filing a Claim
When planning for retirement, Social Security is an important factor to consider. But simply searching without a strategy would be a mistake.
Here are six steps you can take to maximize your Social Security benefits.
1. Work longer to increase lifetime earnings
The Social Security Administration reviews your 35 highest earning years to determine how much you will receive in benefits. Generally, people’s salaries increase as they get older and get into higher positions. That means if you’re working in your 50s and 60s, your high earning years will replace some of the lower earning years you had when you started, potentially boosting your earnings.
2. Tap retirement savings accounts
The longer you wait to receive Social Security benefits until age 70, the more you can get. That’s why many people use a “bridge strategy,” which involves using their retirement savings and investments before they claim Social Security.
Making these withdrawals can allow you to wait longer to receive your benefits, increasing your lifetime income.
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3. Increase your current income
The more money you earn, the more you can get from Social Security. If you can get a promotion, a higher-paying job or a side gig to increase your income, you can also increase your future Social Security payments.
4. Make plans with your spouse
Social Security becomes even more complicated when you plan with your spouse when to claim your money. If you both wait until age 70, you can both get the biggest benefits possible.
But if you need more money now, a spouse with lower lifetime earnings may be able to tap into Social Security. That way, you can live until your spouse with the highest lifetime income reaches age 70 and can take the maximum payout.
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5. Increase hosting contributions
Using catch-up contributions in your mid-50s can lead to a large nest egg and tax-deferred growth when using traditional accounts. You can then withdraw from your 401(k) and individual retirement account (IRA) plans before applying for Social Security. If you can live off the nest egg for a few years, you’ll give your Social Security benefits more time to grow.
Withholding contributions are additional contributions that people over age 50 are allowed by the IRS to make to 401(k)s and IRAs.
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6. Check your Social Security record for errors
It’s possible that the Social Security Administration made mistakes when collecting your past earnings and calculating your benefits. Finding these mistakes can lead to finding the right one – and possibly a higher profit. You can check your history for any errors by logging into your “My Social Security” account on the Social Security website, and report any errors directly to the Social Security Administration.
