Many seniors end up depending pretty heavily on Social Security once their time in the workforce comes to an end. And often, this holds true even among those who make an effort to build savings.
Your goal may be to squeeze as much money out of Social Security as possible. And you may also be aware that delaying your filing is a good way to achieve that goal.
You're entitled to your full monthly Social Security benefit based on your personal wage history once you reach full retirement age, or FRA. If you were born in 1960 or later, your FRA is age 67.
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For each month you delay your Social Security claim past FRA, your monthly benefit will increase by 2/3 of 1%. This means that if you delay your filing a full year beyond FRA, your monthly benefit will get an 8% boost.
Once you turn 70, you can no longer grow your monthly benefit by delaying your filing. But with an FRA of 67, you have an opportunity to boost that benefit by up to 24%.
That said, if your goal is to score the highest payday possible from Social Security, you may not want to bank on a delayed filing. Instead, you may want to concentrate on one important thing during your working years.
A delayed filing may not work out
You might have plans to delay your Social Security filing as long as possible during retirement. But what if you're forced to leave your career behind prior to turning 70?
You never know when health issues might make it so you're unable to work. And you never know when economic conditions or challenges within your industry might make it difficult to hold onto the job you've held for many years.
That's why you can't necessarily assume you'll get the option to file for Social Security at age 70. If things don't go your way, you might need to claim benefits at an earlier age to cover your living costs in the absence of being able to work. If your goal is to snag a higher monthly benefit, you may want to focus on boosting your wages more so than delaying your filing.
The monthly Social Security benefit you're entitled to in retirement will hinge on your earnings during your 35 highest-paid years on the job. If you're reaching the peak of your career at a salary of $90,000 but able to grow your skills and put yourself in line for a $100,000 salary, it will set you up for a more generous Social Security benefit down the line.
Snagging a higher salary isn't the only option you have for scoring a Social Security boost. Earnings from a side job count toward your income, as long as the IRS knows you're making that money. So if you're earning $90,000 a year and you're struggling to get that $10,000 salary bump, you could side hustle your way into it, instead.
A higher monthly benefit could do a lot of good
Any time you bring savings into retirement, there's always the risk of that money running out on you. And you may not have much savings in the first place.
Boosting your Social Security paychecks could spell the difference between struggling financially as a retiree and having enough income to live comfortably. While it's certainly OK to plan on a delayed filing, you should also focus on doing what you can to grow your wages year after year.
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