Ready to unlock greater Social Security benefits? Discover 3 strategies that could help you increase your monthly checks when you retire at 60 or beyond.
Few factors have as significant an impact on seniors’ finances during retirement than the size of their Social Security benefits. According to Gallup’s annual poll, six in ten retirees consider Social Security a major source of income, emphasizing its critical role in financial planning. While annual cost-of-living adjustments (COLA) aim to keep benefits in line with inflation, many seniors are facing rising living costs that outpace these adjustments. In fact, the Senior Citizens League estimates that retirees who started taking Social Security in 2010 have lost about 20% of their purchasing power since then. Thankfully, your Social Security benefits aren’t always set in stone. Here are three practical ways to potentially increase your monthly check beyond the scheduled COLA.
Keep Working or Return to Work in Your 60s
Continuing to work or going back to work in your 60s can have a beneficial impact on your Social Security benefits increase. The Social Security Administration (SSA) calculates your benefits based on your entire earnings history, adjusting earlier earnings for inflation based on an index from the year you turn 60. However, if you earn more as you age — which many people do — your average earnings may increase, potentially boosting your benefit amount.
Key points to consider include
- Earnings from your 60s get factored into your benefit calculation.
- Higher earnings can lead to a recalculated benefit each year once SSA processes your income details.
- Keep in mind the retirement earnings test; if you have not yet reached full retirement age, earnings exceeding certain limits can lead to reduced monthly benefits.
In 2025, if you earn over $23,400, $1 for every $2 you earn above this threshold will be withheld. For those nearing full retirement age, there is a higher limit of $62,160, with $1 withheld for every $3 earned above that limit. Fortunately, your withheld benefits will be adjusted once you reach full retirement age, which ultimately can work in your favor.
Withdraw or Suspend Your Benefits
If you’re contemplating claiming your benefits too early, several options exist for making adjustments that could lead to a larger Social Security check. You can either withdraw your application or suspend your benefits, both offering unique advantages.
1. Withdraw Your Application: If you're still within 12 months of making your initial claim, you can withdraw it. This effectively erases your claim from the record, but you will need to repay any benefits you received and related premiums.
2. Suspend Your Benefits: After reaching full retirement age (FRA), you can suspend receiving your benefits until age 70. This suspension means you won't receive monthly checks, but your benefit amount will increase, potentially by 24% if you wait three years after your FRA to claim. This increased benefit can be crucial when you’re in your 70s and beyond, providing a more substantial financial cushion during that phase of retirement.
Emphasizing the value of these options shows how a temporary suspension or strategic withdrawal can lead to a more prosperous retirement, enabling you to enjoy life without concerns about financial shortfalls.
Claim Social Security Benefits Based on Your Ex-Spouse’s Earnings
Many people may not know that divorced individuals who were married for at least 10 years can claim ex-spouse Social Security benefits. This often-overlooked avenue is a viable option for those seeking to maximize their monthly income.
Consider the following
- If you’re single and divorced, you may claim spousal benefits worth up to half of your ex-spouse's primary insurance amount, which is their expected benefit at full retirement age.
- Claiming these benefits does not affect your ex-spouse’s earnings, and SSA will not notify your ex about your claim.
- If your ex has passed away, you may qualify for survivor benefits depending on your marital status at the time of their death. This could allow you to receive their Primary Insurance Amount, which may be higher than what you might have earned on your own.
Claiming benefits based on your ex’s earnings could raise your monthly check significantly, especially if your ex-spouse had a higher income during your marriage. It’s worth reaching out to the SSA to find out more about eligibility and the claims process, ensuring you aren’t leaving any potential income on the table.
Having a robust understanding of how to maximize Social Security income is essential for every senior. Implementing these strategies could result in a more sustainable financial position during retirement, allowing you to enjoy that time stress-free. Taking control of your retirement finances by continuing to earn, strategically managing your benefits, or exploring ex-spousal benefits could lead to an enhanced quality of life. Additionally, many retirees may overlook a potential annual bonus of up to $22,924 simply by utilizing lesser-known strategies for securing their Social Security benefits. Don’t let potential earnings slip by—learn how these options can play a vital role in planning for a comfortable retirement.