5 Smart Ways to Get More Benefits – The Motley Fool



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Millions of seniors today depend on Social Security to provide a large portion of their retirement income. If you expect to do the same, you will want to do your part to increase your benefits as much as you can. Here's how.

1. Make sure you work at least 35 years

Your social security benefits are calculated based on your best 35 years of earnings. This means that for every year of those 35 years do not If you have a registered income, you get a brutal amount of $ 0 taken into account in the equation of your benefits. Therefore, if you have left the job market for a while (for example to raise children or to take care of a loved one), it is worth considering extending your career to replace several of those $ 0. Now, if you take a very long break (for example, 10 years or more), it may not be possible to burn 35 years of winnings, but the closer you get to that goal, the better.

Older man smiling outside.

SOURCE OF IMAGE: GETTY IMAGES.

2. Fight for raises throughout your career

Since social security benefits are based on earnings, the more money you earn during your career, the higher your benefits will be. And you can help increase your profits by fighting for increases along the way. Even if you think you are getting paid fairly, you should look for salary data for your job title at least once a year and see how your pay check is stacking up. If you find that you are starting to fall behind, you can send this data to your boss and ask for a helping hand.

3. Get a second job

Nowadays, the hustle and bustle is fashionable, with workers of all ages assuming secondary functions to consolidate their savings, repay their debts and have more money to play. But this extra income can serve you another important goal: it can add to your taxable salary base, which, in turn, can increase your social security benefits. If you do not know what kind of hassle you're up against, think about the things you're good at and enjoy doing. Your love of graphic design, for example, might inspire you to hire independent clients and reorganize their websites.

4. File at 70

Once you reach your retirement age, you are entitled to receive the full monthly benefits to which your earnings record entitles you. This age is 66 or 67, or somewhere between these two years, depending on your year of birth. However, if you do not take benefits after retirement age, you will accumulate deferred retirement credits that will increase your monthly benefits for life. These credits cease to accrue at age 70, so there is no need to delay this moment. But if, for example, you are considering a full monthly benefit of $ 1,500 to age 67, waiting until age 70 will increase each payment you receive to $ 1,860, increasing your annual retirement income by $ 4,320. .

5. Retire in a state that does not impose any benefits

Many seniors assume that their social security benefits are free and net of taxes, but this is not true. People with higher retirement income often pay federal taxes on a portion of their benefits. In addition, 13 states impose social security at the state level:

  1. Colorado
  2. Connecticut
  3. Kansas
  4. Minnesota
  5. Missouri
  6. Montana
  7. Nebraska
  8. New Mexico
  9. North Dakota
  10. Rhode Island
  11. Utah
  12. Vermont
  13. West Virginia

Living outside of one of these retired states could help you retain more of your benefits, but you will have to weigh those savings against expenses you might face, such as a higher cost of living. In addition, while the above states make impose a tax on social security benefits, most offer some kind of exemption for low and middle wage earners.

The more money you receive from Social Security, the more financial freedom you will have to retire. Take these steps to increase your benefits and you will be grateful for them during your golden years.

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