The Social Security Benefit Boost Most Americans Never Think About

If you've ever read anything about Social Security, you've probably learned that the age you claim your benefits impacts the size of your payments.

While you can claim Social Security at 62, the longer you wait to start payments, until 70, the more money you get. That's because you avoid early filing penalties that are applied before full retirement age (FRA) and earn delayed retirement credits if you wait to file until after FRA.

However, delayed claiming isn't the only way to increase Social Security checks. There's another move you can make that is often overlooked but could have a big impact. Here's what it is.

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The surprising way you can boost your benefits check

One of the most overlooked methods of increasing a Social Security benefit involves working longer at the tail end of your career if you've increased your earnings over time.

The Social Security benefits formula gives you benefits equal to your average wage during your 35 highest-earning years. Unfortunately, many people have a work history that doesn't span a full 35 years, or that is pretty close to that length. And many people also have years when they didn't earn a lot of money included in their work history, either because they worked part-time, were laid off, or took time off for family obligations.

Salaries tend to increase with age and experience, so you may be earning more as you approach retirement than at many earlier points of your career. If that's the case, then you may want to work a few extra years. Every extra year you work at your current salary can replace some earlier low-earning years when your Social Security benefits are calculated. This can give you a higher average wage and, thus, higher monthly retirement income.

Say, for example, that your benefit calculation includes five years when you earned $25,000 or less on an inflation-adjusted basis, but now you're earning $100,000. You may decide you'd rather work some extra years, retire at 67 instead of 62, and have five years of $100,000 included in your benefits calculation instead.

How long should you work into retirement?

It's up to you to decide how long you want to work later in life, and you can take your individual career history into account.

If you did pretty well throughout most of your career, then you may not need to work for any extra time. But if you had a lot of low-earning years, and you're worried about having enough money in your retirement plans to supplement Social Security, working longer may be a higher priority for you.

Working later into the traditional retirement years can have other benefits, too, including giving you more time to contribute to your 401(k) and boost your overall retirement savings, enabling a delayed Social Security claim, and delaying the time you begin relying on savings.

You should seriously consider whether you have the time and career opportunities available to put in those extra years in your later years -- unless you're confident your retirement savings are sufficient to support you in comfort for the rest of your life.

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