Try These 5 No-Brainers to Beat the Average Social Security Benefit of $1,669

The average retiree receives $1,669 a month from Social Security starting in June 2022. While these checks provide a much-needed boost when you’re in your prime, it’s hard to live on just $1,669. per month.

Unfortunately, this is the reality that many Americans face. About a quarter of adults 65 and older rely on Social Security benefits for at least 90% of their income.

Luckily, you have plenty of options to beat the average edge, especially if you’re still working. Here are five strategies that will help you earn more Social Security than the average retiree.

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1. Negotiate your salary

The easiest way to increase your Social Security benefits is to earn more during your working years. Social Security bases your benefits on an average of your 35 highest earning years.

Of course, you can’t just snap your fingers and conjure up a bigger paycheck. But you can use the sizzling job market to your advantage. With an unemployment rate of just 3.6% in June 2022, companies are competing hard to attract and retain workers. Now could be a great time to get a bigger salary and more money for Social Security by finding a better-paying job or negotiating with your employer for more money.

2. Get a scramble

Another way to use the hot job market to your advantage is to make more money with a side hustle. In 2022, you pay 6.2% of the first $147,000 of earnings in Social Security taxes, plus 1.45% of your overall earnings in Medicare taxes (although some high earners pay an additional tax).

The closer you get to the maximum taxable income in a given year, the bigger your future Social Security checks will be. However, if your stampede pushes your earnings above the maximum taxable amount, it won’t matter for Social Security purposes. So if a secondary hustle pushed your income to $150,000 in 2022, in the eyes of Social Security, you only earned $147,000.

One downside: If you’re a freelancer or contractor, you’ll likely be liable for self-employment taxes. This means that you pay both the employee and the employer’s share of social security and health insurance contributions, or 15.3% in total compared to 7.65% for the most employed. .

3. Work longer

Since Social Security bases your benefits on your best 35 years of earnings, you want to work at least 35 years to maximize your benefits. Say you’ve only worked 32 years. You would have three years plugged into $0 for the Social Security average.

Each year you work where you replace a low income year with a high income year will also increase your benefit. This applies even if you have already started taking Social Security. Remember that if you work while receiving Social Security, the government may withhold part of your benefits if you have not reached full retirement age.

4. Delay, delay, delay

If you rely on Social Security for a significant portion of your retirement income, delaying as long as possible is often the best strategy. You only receive your full benefits at full retirement age, which is between 66 and 67, depending on your date of birth.

Although you can draw benefits as early as age 62, your benefit would be about 30% lower if your full retirement age is 67. But if you wait past full retirement age, you earn an additional 8% deferred retirement credit each year until you reach your maximum benefit at age 70. A person who waits until age 70 will generally receive a benefit that is 77% higher than they would get if they had started at age 62.

5. Suspend your service

If you have already reached full retirement age and can afford to temporarily stop your benefits in exchange for larger checks later, you can voluntarily suspend your benefits. You will accumulate these 8% deferred retirement credits for each year that your benefits are suspended. If you don’t reinstate them yourself, Social Security will automatically restart your benefits once you turn 70.

This won’t be a realistic option if you already rely on Social Security for a significant portion of your retirement income. But if you have other sources of income you can live off of and want to beat the average Social Security check, pausing your benefits could be a viable strategy.

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