(Daily360.com) – As of 2023, many social security beneficiaries receive around $1,827 monthly. The average value fluctuates yearly, depending on the cost of living. While many beneficiaries receive an amount ranging around the average value, one may be able to boost their benefits by another $1,830.
The work to receive this boost needs to happen several years before retiring. Here’s what you need to know.
How Social Security Administration Calculates Retirement Benefits
The Social Security Administration (SSA) uses an individual’s income for 35 years to calculate benefits. The earnings help SSA determine a person’s primary insurance amount (PIA), or the amount an individual would receive if they claimed their benefits.
If one claims benefits before their full retirement age, SSA offers a lower amount to compensate for the beneficiary theoretically receiving benefits for a longer period of time. If one claims benefits a couple of years after their FRA, SSA gives a higher amount.
How to Maximize Social Security Retirement Benefits
There are two ways to get an extra $1,830 from SSA. One by maximizing your highest income producing years and the other involves delaying the receipt of benefits.
Increasing Yearly Earnings
The SSA uses your 35 highest-earning years to determine the benefits that you’ll receive. Typically, beneficiaries who earn and contribute more to SSA get higher benefits. Those who make and contribute smaller amounts will receive reduced benefits to match.
Thus, beneficiaries who want an extra $1,830 should strive to increase their annual earnings. This requires advanced planning and is something younger workers should consider early on as opposed to later in their careers.
In 2022, SSA’s top earners made an average of $147,000 in the 35 years they earned the most. Since the figures change yearly, beneficiaries should watch out for the changes to keep up with SSA.
Delaying Receipt of Social Security Benefits
SSA gives social security benefits to individuals at their full retirement age (FRA). The current FRA is 66 or 67. The FRA is no longer 65 years old as it was in the past.
People who receive benefits before their FRA get lower benefits. SSA assumes that they will get more value since they live to enjoy benefits for a longer period of time. .
Delaying, on the other hand, can make a huge difference. For instance, if one’s FRA is 66, waiting until age 70 may increase benefits by as much as 32 percent.
Maximum Social Security Benefits for Highest-Income Earners
In 2022, high-income earners received $4,194 per month as the highest payout. SSA awarded the benefits to individuals who earned at least $147,000 in 35 years they worked. Additionally, most of these beneficiaries claimed their benefits at 70.
How to Increase Income for Social Security Benefits
One way to boost income is to seek a promotion or a pay rise. Otherwise, there are a lot of things you can do to increase your filed earnings each year:
Getting a Side Business or Job
- Consulting: Professionals with a wealth of experience in a particular field can offer consulting services to businesses or organizations. The individuals can offer consultancy after work or online.
- Online Business: There are many businesses to engage in online. Top choices include running an e-commerce store or an affiliate marketing program. One can also do drop-shipping, content creation, or SEO.
- Renting out a room: Individuals with extra rooms in their homes can rent to students and young professionals. Furthermore, individuals can start an Airbnb to accommodate visitors looking for a place for short stays.
- Teaching or Tutoring: Specialists in a particular subject can opt to coach young professionals. The coaches can tutor in person after work or online in their free time. They can also make and sell courses online.
- Pet-sitting or dog-walking: People who love dogs can start a dog-walking business to earn extra money. They can offer the service during the weekends or evenings after work. Alternatively, they can employ people to run the business.
- Freelancing: People with talent in graphic design or digital marketing can offer services online as freelancers. Other good freelancing ideas include web development and app development.
- Personal training: Due to the high demand for personal training, becoming a personal trainer is a profitable opportunity. What’s more? It allows for a flexible schedule, which is ideal for running as a side job.
Investments
We’re not talking about standard stock market investments here. We’re talking about things you can do to truly invest in creating a larger income. For instance, one can invest in stocks, an option that provides passive income. Other than stocks, people can consider other investment options like:
- Real estate: Rental properties provide a steady income with little involvement. No wonder the investment stands as one of the best. Holding a rental property, for example, can bring in years of monthly revenue but should be considered carefully if one isn’t prepared for maintenance and upkeep.
- Starting a business: Entrepreneurs can start a business to boost their income. They can run their business independently or employ someone to do it. Some businesses to consider include selling a service or a product.
- Investing in annuities: An annuity is another investment for those who wish to increase their earnings. In this investment, an individual invests in an insurance firm. In return, the insurance pays back periodic payments.
Note that investing can result in profits or losses. As such, one should seek professional advice before getting their feet wet. That way, they increase the chances of making profits while reducing losses.
Not many people can say they know someone earning the maximum monthly social security payout. Take a look at your next review statement and keep track of your forecasted payment trends. Is there more you can do to maximize your earning years before retirement? Now’s the time to start planning.
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