Retirement is an important phase of life that is often idealized. You’ve worked hard throughout your lifetime to support yourself and your family and having those golden years to look forward to is very much a light at the end of the work tunnel.
For many people, retirement encompasses the dream of finally being able to focus exclusively on doing what you love most. It’s a moment in life where it’s justified to swap out cubicles for world travel and family homes for beach condos—no questions asked.
Earning retirement is one thing while paying for it’s entirely another. Many of us are counting on that Social Security check to guide us through the financial demands of retirement, but we’re slower to admit that we might not understand exactly how it all works.
At a minimum, a Social Security check can be expected during retirement, but what many retirees miss out on is the opportunity to significantly increase those benefits that they’re entitled to. If you’re someone who’s hoping to include a new boat in your retirement experience, you’ll want to go grab a pen now because the following tips are worth writing down!
Continue to Put in the Work
I know, I know…you already work hard. However, there’s more to be done if you really want to reap the best benefits that a Social Security check can offer down the road.
Many people assume that the Social Security benefits they’ll receive in retirement will be an accumulation of all the income they’ve collected over the years. In reality, the check that ends up in your pocket is determined by the 35 top-earning years of your work life!
This means that if you have gaps in your work history, it’s worth putting in the extra time to make up the difference. A low-earning year can be offset by a year in which you focused exclusively on earning overtime. Ultimately, your Social Security check is going to reflect that effort later on.
Create a Benefits Account and Track Your Earnings
It’s entirely possible to receive a Social Security check in retirement and never really understand where the amount originated from. However, if you want to make sure that check is as large as it should be, tracking your progress before you settle into that beach chair is essential.
Increasing your Social Security benefits could be as simple as a few clicks of a button. The Social Security Administration allows users to sign up for an account on their website and monitor the status of their Social Security benefits over time.
This account should be a direct reflection of your professional earnings, but it’s not uncommon for mistakes to be made, due to faulty reporting on the part of employers. Catching these mistakes and having them corrected will lead to more money in your pocket down the line.
Forget Locking in at 62
Would you ever feel comfortable throwing $250,000 in the trash? Of course not! But that’s essentially what happens when you fall to the temptation of collecting Social Security benefits at the age of 62.
Yes, the money is available and waiting for you, which makes it appealing. That said, those who collect their benefits at the earliest age limit will miss out on that fund growing roughly 7% to 8% more with each year that passes!
Life circumstances can make it impossible to put off collecting Social Security benefits, but the longer you can wait, the better off you’ll be. Any amount of extra time you can give yourself past age 62 will show up in the form of a bigger Social Security check. Cha-ching.
Forget Retiring at 65
Now that you know you don’t want to retire at age 62 to grow your Social Security benefits, you only have to wait until age 65, right? Wrong.
It’s a common misconception that retirement benefits can be collected in full at age 65. Unfortunately, it’s a belief with roots dating back to 1935, when Social Security was first created. This misconception keeps many Americans from receiving the best of what they’ve worked for.
As of 1983, the metrics surrounding the ability to claim full Social Security benefits have changed. These days, anyone born after 1960 can expect to claim their full benefits at the age of 67.
If you’re able to hold off longer, it’s in your financial interest to do so. The age benefits max out at 70 years old.
Consider Past Relationships
In the name of financial responsibility and wellbeing, it’s important to think of your exes when it comes to boosting your Social Security benefits. Don’t worry…it’s not backsliding, just being savvy with your savings.
It’s a little-known fact that if you’re currently divorced, but were previously married for 10 years or more, you may be able to collect Social Security benefits that reflect your ex’s work history. In some cases, this is up to 50% of what your ex would earn when they’re eligible for full retirement benefits. Sweet!
It’s important to note that the decision to collect on your ex’s Social Security benefits won’t reduce the amount they’re eligible to receive; it simply adds to your Social Security check. You and your ex also have to be at least 62 years old to qualify for this particular benefit.
If you’ve moved on from that past relationship relatively quickly, you might be out of luck. Collecting on an ex-partner’s Social Security benefits only works if you remain unmarried. The minute you tie the knot again, those benefits are no longer yours to enjoy.
Ready for another twist? If your ex-husband or ex-wife of at least 10 years passes away, you may qualify for survivor benefits. In this scenario, if you happen to be upwards of 60 years old, remarrying won’t affect the additional benefits you can collect.
Retirement is inspiring, but if you take time now to track your Social Security benefits, your retirement could also be rather lucrative. Invest the time today to make tomorrow amazing. After all, you deserve it!
Here’s to the Wellness of Your Wallet!