Want to Boost Your Social Security Benefits by 24%? Here’s the Trick

It’s an unfortunate fact that many older Americans are woefully unprepared for retirement. In fact, the median retirement savings balance among Americans ages 65 to 74 is only $200,000, according to the Federal Reserve.

If you’re approaching retirement without a whole lot of savings, then you may want to do what you can to score a larger Social Security check. The more money you get in benefits, the easier it becomes to compensate for a lack of savings.

Thankfully, there’s a really easy way to boost your monthly Social Security payments by 24%. But you’ll need to consider whether chasing a higher benefit is actually a smart move.

How to snag an incredible Social Security boost

The monthly benefit you’re eligible for from Social Security will depend on how much money you earned throughout your career. From there, you’ll be eligible for that benefit without a reduction if you sign up for Social Security at full retirement age (FRA).

FRA hinges on when you were born. But if your birth year is 1960 or any time after, FRA kicks in at 67.

As a point of clarity, you can claim Social Security as early as age 62. But 67 is when you’ll get your complete monthly benefit.

However, if you choose to delay your Social Security claim beyond FRA, your monthly benefit will get an 8% boost for each year you hold off.

Once you turn 70, your benefit will stop growing. But this means that if you have an FRA of 67 and you wait until age 70 to claim Social Security, you’ll score a pretty amazing 24% boost to your monthly benefit for the rest of your life.

What might that mean for you?

As a basic example, the average monthly Social Security benefit today is about $2,000. If you were to claim Social Security at 70, a $2,000 benefit could be worth $2,480 instead. That’s an extra $5,760 a year in Social Security you can use to supplement your savings or just plain buy yourself extra financial wiggle room.

In fact, even if you’ve saved a decent amount of money for retirement, it could still pay to delay Social Security past FRA for a boosted benefit.

You don’t know how long you’re going to live or how long your savings will need to last. You also don’t know what surprise expenses might arise during retirement, like home repairs or healthcare needs. So if you raise your Social Security benefit for life, you’ll have that much more flexibility, no matter what happens.

Look at the big picture

It’s a great thing that you have the option to guarantee yourself a larger Social Security paycheck each month for life. But there are some downsides to filing for benefits at 70 you should know about.

First, unless you have a lot of savings, you may need to keep working until age 70 to hold off on Social Security. That could mean delaying your retirement and having to plug away at a job for longer than you want to.

Also, if you don’t end up living a very long life, then claiming Social Security at 70 could mean ending up with less lifetime income despite a higher monthly benefit. You’ll need to consider the state of your health when making your choice.

But otherwise, you should know that Social Security makes it pretty easy to score larger benefits. So if you like the idea of more guaranteed income for the rest of your life, then it could pay to wait on Social Security rather than sign up as soon as FRA arrives.