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For those who have managed to save millions for retirement, Social Security benefits may not be a primary concern. However, the reality for the average retiree is quite different, with many relying significantly on Social Security to cover living expenses. If you anticipate that you will depend on these benefits, it is crucial to maximize your potential Social Security payments.
Fortunately, there are proactive measures you can take right now to enhance your future Social Security benefits. Below are three strategies to consider.
1. Verify Your Earnings Record
Your Social Security benefits will be largely determined by your earnings history over your working life. Therefore, ensuring that the Social Security Administration has accurate income records is vital. Misreported income could lead to lower benefits than you deserve.
To verify your earnings, create an account on the Social Security Administration’s website to access your earnings statements. Make it a habit to review these statements annually. This not only allows you to see your earnings summary but also provides an estimate of your expected Social Security benefits, offering valuable insight for your retirement planning.
2. Explore Gig Economy Opportunities
Increasing your retirement savings can reduce your reliance on Social Security. If your current salary limits your ability to contribute to retirement accounts like an IRA or 401(k), consider engaging in the gig economy. Additional income from part-time work can help bolster your savings and alleviate immediate financial pressures.
Moreover, earnings from gig work can enhance your Social Security benefits. Employment that generates taxable income contributes to your earnings record, as long as you stay below the current wage cap of $176,100. For example, if you earn $80,000 in your full-time role and supplement it with a side job paying $500 monthly, reporting that income adds an additional $6,000 annually to your Social Security earnings record.
3. Prioritize Your Health
Although improving your health won’t directly increase your monthly Social Security check, a healthier lifestyle can lead to a longer lifespan, potentially resulting in greater lifetime benefits. The longer you live, the more years you could collect Social Security payments.
Improving health can involve various approaches, from ensuring adequate sleep to making healthier food choices. Mental well-being is equally important; if you find yourself regularly stressed, consider stress-relief techniques such as meditation or spending time in nature. If job-related stress is a constant, reassessing your work environment may also be beneficial.
By taking care of your health, you may reduce medical expenses both now and during retirement. This, combined with potentially larger Social Security benefits, can lead to a more enjoyable retirement.
As you plan for retirement, consider these strategies to maximize your Social Security benefits. The sooner you take action, the more favorable your benefits may be in the future.
Source
www.fool.com