Ask Larry

How Can I Raise My Monthly Benefit Rate?

I'm a hair stylist in my mid 60's and my social security is projected to be 1300 at 70. What can I do to get the payment as high as possible?

Hi Jackie,

There's really only two ways to increase your monthly retirement benefit rate:
1) Wait past full retirement age (FRA) to begin drawing your benefits; and,
2) Continue to earn as much annually as possible.

Social Security retirement benefits are based on an average of a person's highest 35 years of wage-indexed earnings ( If you had less than 35 years of earnings subject to Social Security taxes, zero years are averaged into the computation. By replacing zero or low earnings years with higher earnings years, you can continue to increase your full retirement age rate (PIA) indefinitely.

You can further increase your monthly rate by waiting past full retirement age to start drawing your benefits. Delayed retirement credits (DRC) are added for each month that you defer taking benefits past FRA. DRC's amount to 8% per year, so if you wait until age 70 to start drawing benefits your monthly rate will be 32% higher than if you start drawing at FRA.

The maximization software available on this website allows you to enter projected future earnings in order to determine their effect on your monthly benefit rate, which should help you with your planning. Also, if you are married now, or were married in the past and divorced after 10 years, you may have other filing options available to you. The maximization software can help you determine that as well.

Best, Jerry

Apr 11 2017 - 7:15am
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