The average retiree collects $2,086 monthly from Social Security, replacing only 40% of pre-retirement income, making additional savings essential.
Delaying Social Security past full retirement age of 67 earns an 8% permanent annual benefit increase, maxing out at age 70.
Social Security calculates benefits from your 35 highest-earning years, so boosting wages through promotions or side hustles directly raises your payout.
Read More: Learn 7 ways to generate income with a $1,000,000+ portfolio (sponsor)
There's a reason workers are encouraged to save for retirement rather than rely on Social Security alone.
The typical Social Security benefit will replace about 40% of an average worker's pre-retirement paycheck. Most retirees need considerably more income than that to live comfortably, so savings or another income source generally has to bridge that gap.
But if you play your cards right, you may be able to set yourself up with a monthly Social Security benefit that's higher than the average.
The average Social Security benefit for retirees today is about $2,086. On an annual basis, that's about $25,000.
It's worth noting that Social Security pays benefits outside of retiree checks. It also pays disability benefits, for example.
If you'd like to get more than $2,086 a month in Social Security, it's important to know how those benefits are calculated.
Social Security takes your 35 highest-paid years of earnings into account to establish your primary insurance amount. But your filing age also determines what monthly benefit you get.
You're entitled to your Social Security benefit without a reduction at full retirement age (FRA), which is 67 if you were born in 1960 or later. But if you file prior to FRA, your benefit will be reduced. You can sign up for benefits starting at age 62.
On the flipside, there's a big incentive to delay Social Security past FRA. For each year you do, until you turn 70, your benefit gets an 8% increase. And that increase is permanent.
If you've saved over $1,000,000, this guide is for you. The last thing you want in retirement is to run out of money, you want your money to generate lasting income while you enjoy your life.
Now you can learn the strategies wealthy retirees use to fund their retirement with The Definitive Guide to Retirement Income from Fisher Investments. Download the guide today! (sponsor)
If you want to beat the average monthly Social Security benefit, there are two things you can do.
Build skills that allow you to get promoted and increase your pay. Pursue side hustles that pad your paycheck. Side wages count as long as they're reported and you pay taxes on them, which you're required to do,
If you're able to keep working once you reach FRA, waiting to file for Social Security could boost your checks for life. That could lead to a benefit that beats the average. You may also be able to lean on investments or other income to bridge the gap between FRA and age 70 if you don't want to work past FRA.
Of course, even if you don't delay Social Security, you may be entitled to a higher benefit than the average due to making more money during your career.
To get an idea of what you're entitled to, create an account on the Social Security Administration's website and look at your most recent earnings statement. It should include an estimate of your monthly benefit so know what to expect.
Finally, remember that if you continue working while collecting Social Security, you may be able to increase your benefits if your wages at the time replace a year or more of lower earnings. And the program's cost-of-living adjustment should also increase your benefits over time, albeit modestly from year to year to keep up with inflation.
If you've saved over $1,000,000, this guide is for you. The last thing you want in retirement is to run out of money, you want your money to generate lasting income while you enjoy your life.
Now you can learn the strategies wealthy retirees use to fund their retirement with The Definitive Guide to Retirement Income from Fisher Investments. Download the guide today! (sponsor)
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