Retirement doesn’t always mean the end of earning. In fact, many Americans continue working past their retirement age, either for financial reasons or personal satisfaction. What many don’t realize is that working longer can actually increase Social Security benefits.
The Social Security Administration (SSA) automatically adjusts benefits if your recent earnings are higher than in previous years. This means that if you continue working, you could see an increase in your monthly payments—offering better financial security during retirement.
Delaying Benefits Can Lead to Bigger Payouts
If you choose to delay claiming Social Security past your full retirement age, you could earn even more. For every year you wait (up to age 70), your monthly benefits increase by approximately 8%.
This is known as delayed retirement credits, and it’s a great way to maximize your income. Many retirees who wait to claim their benefits end up receiving significantly higher payments, which can lead to a more comfortable and financially stable retirement.
How to Ensure You Get the Highest Benefits
To take full advantage of these benefit increases, start by checking your earnings history. You can do this by logging into your my Social Security account to verify that your income records are accurate. If there are any errors, they could impact your benefit calculation, so it’s important to correct them as soon as possible.
Another key factor is understanding your full retirement age (FRA). If you continue working beyond this age and haven’t claimed benefits yet, you may want to delay your application to earn more credits. However, this decision should be based on your personal financial needs. If you require income sooner, it might not be beneficial to delay your benefits.
Requesting a Recalculation and Seeking Expert Advice
The SSA reviews earnings every year to determine if adjustments are needed. However, if you feel your current benefits don’t reflect your earnings, you can request a recalculation. Simply contacting the SSA can help resolve any discrepancies and ensure you’re receiving the highest possible payments.
Additionally, consulting a financial advisor or Social Security expert can be highly beneficial. These professionals can guide you based on your unique employment and financial situation. Their advice can help you maximize your Social Security benefits and create a stronger financial plan for your retirement years.
Other Factors to Keep in Mind
Before deciding to work past retirement, it’s important to consider how it might affect your taxes and other retirement income.
Everyone’s situation is different, so seeking personalized advice from a financial expert or directly from the SSA is always a good idea. Making well-informed decisions can lead to greater financial security and peace of mind in retirement.
