Many seniors rely heavily on Social Security to make ends meet in retirement. And those benefits might similarly become an important income source for you.
That's why it's so important to do what you can to set yourself up with a generous Social Security benefit down the line. And if you make these moves next year, you might end up doing just that.
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1. Boost your wages
Social Security doesn't pay all retirees the same amount of money each month. Rather, your monthly benefit is a function of your personal earnings history.
Even more specifically, the monthly benefit you're able to collect in retirement is based on your income during your 35 most profitable years in the workforce. So the more you're able to earn, the higher a benefit you might end up with.
One misconception, though, is that earnings have to come from a salaried job to count for Social Security purposes. The truth is that any income you earn and pay taxes on counts toward your future benefit. So if you're willing to join the gig economy in 2024 and boost your income with a side hustle, you might set yourself up with a larger monthly benefit in retirement -- not to mention give yourself more buying power in the new year.
2. Check your earnings statement for errors
Each year, the Social Security Administration (SSA) issues workers an earnings statement that summarizes their wages. It's important to review that statement for errors, because underreported income could result in a lower Social Security benefit than what you're really entitled to.
Now if you're under the age of 60, you'll need to create an account on the SSA's website to access your earnings statements, since they won't automatically get sent out in the mail. But that's not a difficult thing to do. And from there, you can not only monitor your recorded earnings, but also get an estimate of your future Social Security benefit.
3. Delay your filing if you're reaching full retirement age
If you're reaching full retirement age (FRA) in 2024, you may be inclined to sign up for Social Security right away. After all, at that point, you don't have to worry about any sort of reduction. But if you're willing and able to hold off a bit longer, you can score a higher monthly benefit for life.
Granted, for that to be possible, you might need to still be working in some capacity. But if you are, and you aren't miserable at your job, holding off could really work to your advantage.
For each year you delay your Social Security claim past FRA, your monthly benefit grows by 8%. Now this incentive only lasts until age 70. But still, you can snag quite a nice boost by delaying your filing as long as possible. And if you don't want to wait until age 70 to get Social Security, wait a year beyond FRA, or two years. That's certainly a reasonable compromise.
A higher Social Security benefit could make retirement much less financially stressful. Make these moves in the new year so you're more likely to end up happy with your monthly benefit once it's time to collect it.
