How to Increase Your Social Security Check By 32%

Before I can show you how to increase your full Social Security benefit by 32%, I need to explain how Social Security works. Numerous myths have arisen around Social Security and how benefits are calculated and paid. My goal is to show you how to increase your monthly benefit check by 32%. Issues pertaining to how your benefit is calculated will only be addressed as it affects the discussion at hand.

A brief overview of the benefit calculation is as follows: Benefits are determined by the worker’s primary insurance amount or PIA. You arrive at the PIA by taking the adjusted indexed monthly earnings over the worker’s highest 35 years. The indexing reflects the percentage increase of wages over the time period. Think of it as inflation adjusted wages. This is incorrect in terminology but a reasonable way to think of it to understand how Social Security benefits are reached. Your wages from 30 years ago are adjusted to approximate current wages. One or two really high or low wage earning years will have a modest effect on the total benefit and wages earned earlier in the working career will be adjusted up to an equivalent wage today.

The chart to the right shows full Social Security retirement age. At full retirement you get a full benefit. You can retire at age 62 at a reduced benefit. The chart below outlines the amount of reduction from a full retirement benefit multiplied by how many months retirement is early and the maximum reduction in benefit possible. These rates do not apply to disability benefits, those over age 70, or those working outside the United States not covered by Social Security.

Benefits are reduced $1 for every $2 of earnings over $14,160 in 2009. The month full retirement is reached, the earnings limitation is eliminated. From full retirement age and older, the Social Security recipient can earn any amount without fear of reducing his Social Security benefit.

The decision to take early retirement must also take into consideration the reduction your spouse will also experience. With your spouse’s reduced benefit, the maximum reduction listed in the last column of the chart below can be exceeded. In a sentence, a worker, his dependents, and survivors are reduced by early retirement

Once a worker reaches full retirement, he will receive an 8% per year increase in his monthly benefit to age 70. People reaching retirement age at this time can get 4 years of 8% increases, for a total of 32%. The benefit of waiting is even greater when considering the 32% increased benefit is further increased by inflation adjustments. It is not hard to imagine a worker getting a Social Security benefit over 40% higher than the full retirement benefit. Dependents and survivors also get the increased benefit.

If you already took early or full retirement and want the 32% bonus, you can pay Social Security back the benefits paid and get the new increased benefit. I have sent clients to Social Security to pay back the benefit and get the higher monthly benefit. In many cases, the Social Security employee has to look up the rule it is so rarely used. It is available and not talked about much. Most people want to know how much and how soon when getting Social Security. This is the way to receive the worst benefit. Next, we will outline an action plan to get some Social Security now and the largest amount later.

Now that the ground rules have been explained, it is time to apply this information for the greatest Social Security benefit.

You can take Social Security in one of two ways: you can take your own or half of your spouse’s benefit. This leads to an interesting situation. For most people, the lowest earner should take half of their spouse’s benefit as soon as possible; the highest earner should wait until age 70. Depending on your personal situation, you both may be able to take half of each other’s benefit and then later claim your own benefit later.

Armed with this information, you can work with Social Security to get the greatest benefit for you and your family.

I encourage you to bookmark this article for further reference. Social Security is a complex issue with a large amount of money at stake. Armed with this article, you can work with Social Security for the largest benefits for you and your family.