The Typical Amount Received from Social Security Benefits May Surprise You. Discover Strategies to Enhance Your Payment before Retirement.
The Typical Amount Received from Social Security Benefits May Surprise You. Discover Strategies to Enhance Your Payment before Retirement.
Lots of older Americans today rely on a monthly payment from Social Security as their primary income source. It might shock you to find out that as of October 2024, the typical retired worker collecting Social Security was only receiving $1,924.35 per month. That's just over $23,000 on an annual basis, which isn't exactly a substantial sum.
Unfortunately, Social Security recipients won't be seeing much of a raise in 2025. The cost-of-living adjustment for Social Security in 2025 will be a mere 2.5%, which translates to an extra $48 per month.
On the bright side, if you're looking to enhance your Social Security benefits in retirement, there are some strategies to consider.
1. Enhance your income while you're still working
The more money you bring in, the more generous a Social Security benefit you might receive in retirement. So it's wise to pursue opportunities to boost your income, be it through learning new skills for a promotion or by changing jobs smartly.
If you're up for a second job, you'll be happy to know that gig work counts toward your Social Security benefit. Just remember to report your earnings, as it's required by law.
2. Ensure your earnings record isn't lacking income
Your earnings determine the amount of money you'll receive from Social Security each month. It's crucial to ensure that the Social Security Administration (SSA) has accurate wage data on file.
To keep tabs on your earnings, create an account on the SSA's website and review your earnings statement annually. The statement will display your wages together with an estimate of your monthly benefit. If you spot inaccurate wage data, reach out to the SSA to help them correct their records.
3. Wait to file beyond your full retirement age
Your "full retirement age" is when you become eligible for your complete monthly Social Security benefit. You can apply as early as 62, but submitting your claim before your full retirement age will result in a reduced benefit for the rest of your life.
Your full retirement age varies depending on the year you were born. If you were born in 1960 or later, it's 67. For each month you postpone your Social Security claim beyond your full retirement age, your monthly benefit increases by approximately two-thirds of 1%. That's an annual boost of 8%.
After you reach 70, you'll no longer be credited for delaying your Social Security claim. Therefore, you should aim to submit your claim by that age. But if your full retirement age is 67 and you apply at 70, you could see your monthly benefit increase by 24% – for the rest of your life.
Remember, Social Security will only provide you with a limited income in retirement. However, if you put in the effort, you can boost those monthly payments and secure a higher income in your senior years. But, make sure to diversify your financial resources by building savings as well, so you can supplement your Social Security income and avoid financial strain once you retire.
To supplement your limited income from Social Security in retirement, consider building savings as a strategic financial move. By saving more money, you can create a safety net to supplement your Social Security payments and avoid potential financial strain during your golden years.
Additionally, being mindful of your retirement savings and investment strategies can contribute to a more financially secure retirement. Seeking professional financial advice and creating a comprehensive retirement plan can assist in maximizing your retirement income, ensuring that your Social Security benefits are just one part of a diverse financial portfolio.