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How to Increase Social Security Retirement Benefits After You Apply

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According to the Social Security Administration, Social Security benefits make up about 30% of the income of American seniors.

For some beneficiaries, it may be 90% or more.

Yet, according to social security expert Larry Kotlikoff, author of a new book, “Money Magic: An Economist’s Secrets to More Money, less risk and a better life.”

The money you pay into the system is usually fixed and amounts to 12.4% of your work earnings subject to social security contributions. These taxes are split 50-50 between you and your employer, so you each pay 6.2%, up to a certain limit. In 2022, this tax applies up to $147,000 in salaries.

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Yet the money you could possibly recoup from the program is not set in stone.

If you apply at the youngest age for which you qualify – 62 – you will receive permanently reduced benefits. If you instead apply for your full retirement age – usually between 66 and 67, depending on the year you were born – you will receive 100% of this benefit based on your work record. For each year of waiting until age 70, you can increase your benefits by 8% through what are called deferred retirement credits.

However, according to Kotlikoff, there are other ways to increase your benefits even after you apply.

Pause and restart your benefits

If you are between full retirement age and 70 and already receiving benefits, you can always stop your monthly checks now and start them again later so that your benefits start to increase again.

The increase you will receive is the deferred retirement credit for the time your benefits were suspended.

But beware: if your spouse or children receive benefits based on your file, their checks will also stop. And their benefits won’t increase during that time, except for adjustments for inflation, Kotlikoff said.

Age to receive all social security benefits

year of birth Full retirement age
1943-1954 66
1955 66 and 2 months
1956 66 and 4 months
1957 66 and 6 months
1958 66 and 8 months
1959 66 and 10 months
1960 and after 67
*People born on January 1 of any year refer to the previous year.

Alternatively, if you decide to apply but regret your decision, you can get a reconsideration through what is called a withdrawal of application.

This is only available as long as it has been less than 12 months since your decision to claim was made. However, the catch is that you will need to repay any benefits you received – including any spousal or dependent benefits that may have been paid to your family – in order to reverse your decision. Moreover, you can only do it once in your life.

Consider going back to work

When Social Security retirement recipients are still working, they may be subject to a retirement income test if they are below the normal retirement age.

Benefits for people in this category whose income exceeds a certain level will be reduced.

In 2022, the annual amount exempted is $19,560 for people who have not reached retirement age. But for people who will reach retirement age this year, the annual exemption amount is $51,960, which only applies to the months before your birthday.

Notably, once you reach retirement age, your monthly benefits are permanently increased to compensate for the months where benefits were withheld, according to the Social Security Administration.

These benefit cuts coupled with other taxes workers pay can unduly discourage recipients from returning to work, even after their impact subsides, Kotlikoff writes.

Earn more money

There’s another reason working longer can boost your benefits.

Your Social Security benefits are calculated based on your covered earnings or jobs for which you paid taxes to the program.

Generally, the Social Security Administration ranks all of your income for those years and takes the top 35 values. This ranking is used to form your average indexed monthly earnings, which are then used to calculate the amount of benefits you will receive if you apply at your retirement age.

If you continue to work, it is possible to increase your indexed average monthly salary, and therefore the monthly benefits to which you are entitled.

This is especially important for people with inconsistent work histories or who have taken time out of the workforce and have low earnings or even zeros for a few years.

This is also especially true for high-income older workers who earn above the annual Social Security tax cap ($147,000 in 2022).

“By earning more, regardless of your age, you can replace those low points with positive or higher value,” Kotlikoff writes.