Despite concerns about the future of the SSI program, millions of seniors rely on it for their retirement income. While it’s not advisable to solely depend on Social Security, it’s important to factor it into your retirement plan. As a worker, you’re familiar with the fact that a portion of your paycheck goes towards Social Security. Therefore, it’s crucial to aim for the highest possible benefit amount when you’re ready to retire.
Many people suggest that the optimal strategy for maximizing SSI benefits is to delay your filing until age 70. By doing this, you can receive a minimum 24% increase to your benefits compared to what you would receive at full retirement age. However, it’s important to acknowledge that delaying Social Security until age 70 may require working until that age, which may not be desirable. Although life expectancy has increased, you may prefer to retire earlier and enjoy your retirement while your health is still robust.
Increase your SSI benefits without having to extend your working years
Fortunately, there’s an additional strategy you can use to increase your Social Security benefits without having to extend your working years. When calculating your monthly retirement benefit, the Social Security Administration (SSA) considers two primary factors: your lifetime earnings and the age at which you apply for benefits. Therefore, it’s crucial to ensure that the SSA has precise records of your earnings.
The SSA issues an annual earnings statement to all workers, which summarizes their wages. If you’re 60 or above, you should receive the statement by mail. Alternatively, you can access it online by creating an account on SSA.gov. It’s crucial to dedicate a few minutes each year to reviewing your earnings statement. If the SSA’s record shows a lower income than what you actually earned, it could lead to a permanently reduced retirement benefit. On the other hand, correcting any errors made by the SSA could potentially increase your benefit amount.
For instance, suppose you changed jobs in a particular year, earning $20,000 for a few months at one job and $85,000 for the majority of the year at the next job. If the SSA’s record omits your $85,000 of earnings for that year, it could lead to a reduced monthly benefit in the future. However, identifying and correcting this error could potentially result in a higher benefit amount.
Ensure a financially stable retirement for yourself
It’s optimal to have a substantial amount of savings by the time you retire. However, even with savings, Social Security benefits may still be a crucial part of your retirement income. That’s why it’s essential to take steps to maximize your benefits, and reviewing your earnings record every year is a simple yet effective way to achieve this.
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