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.

Social Security Full Retirement Age

 
 
Year of Birth 
Full Retirement Age 
1937 or earlier 
65 
1938 
65 and 2 months 
1939
65 and 4 months
1940
65 and 6 months
1941
65 and 8 months
1942
65 and 10 months
1943-1954
66
1955
66 and 2 months
1956
66 and 4 months
1957
66 and 6 months
1958
66 and 10 months
1960 and later
67

Early Retirement

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

Reduction In Social Security Benefits

Year of Birth 
Full Retirement Age 
Age 62 Months of Reduction 
Monthly Percent Reduction
Total Percent Reduction
1937 or earlier
65
36
.555
20
1938 
65 and 2 months 
38 
.548
20.83
1939 
65 and 4 months 
40 
.541
21.67
1940 
65 and 6 months 
42 
.535
22.50
1941
65 and 8 months
44
.53
23.33
1942
65 and 10 months
46
.525
24.17
1943-1954
66
48
.52
25
1955
66 and 2 months
50
.516
25.84
1956
66 and 4 months
52
.512
26.66
1957
66 and 6 months
54
.509
27.50
1958
66 and 8 months
56
.505
28.33
1959
66 and 10 months
58
.502
29.17
1960 and after
67
60
.5
30

Applying Online for Social Security Benefits-Part 1

Increasing Full Retirement Benefits by 32%

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.

Applying for Social Security Benefits Online-Part 2

It Is Never Too Late

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.

Planning Tip

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.

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Comments 8 comments

GWC 3 years ago

PLEASE CLARIFY: CAN I TAKE MY SPOUSE'S HALF OF SS PAYMENT AND SHE TAKE MY HALF SS PAYMENT AT THE SAME TIME -- I AM 69; I AM NOT EMPLOYED. SHE IS 66 AND EMPLOYED, WILL WE BE ABLE TO DEFER BOTH OF OUR OWN SS INCREASED BENEFITS TO AGE 70 AT THE FULL 32% RATE INCREASE?


JG 3 years ago

MY SPOUSE WILL BE 69 IN APRIL 2013; I AM 66 (JAN 2013). MY SPOUSE DEFERRED HIS SS AND PAID BACK ALL HE RECEIVED WHEN HIS SS BECAME EFFECTIVE AT AGE 66 - 2+ YEARS AGO. MY QUESTION IS WHEN WILL THE 8%/YR FROM 2010 EFFECT HIS SS PAYMENT - AT AGE 69 WHEN HE FILES FOR SS OR RETROACTIVE AS OF JAN 1 2013? SS HAS GIVEN US INFO. WE DO NOT UNDERSTAND.


KeithTax profile image

KeithTax 4 years ago from Wisconsin Author

Unfortunately, the payback option no longer exists. For most people waiting is best, unless you plan on dying young.


Millionaire Tips profile image

Millionaire Tips 4 years ago from USA

This is interesting, I knew you would get less if you retired early, but I didn't know that you could pay it back and switch "plans". Do you have to do this within a certain time period?


MojoDawg profile image

MojoDawg 4 years ago from Fort Worth Texas

Keith, I had previously thought I would take my benefits at 62 but I actually never knew the huge difference in benefits. This is a real eye opener especially the 32%+ increase over the 4 year period. With shrinking retirement accounts which I personally suffered and the "unseen financial perils ahead" it is wise to bolster every card we have in our hands now. Thanks for this informative hub. Voting up!! Blessings::)


stessily 4 years ago

Keith Tax, This is an interesting, helpful presentation. Clearly there is a lot to consider when deciding upon early retirement or delayed retirement. Your presentation provides guidance in making that important decision.


KeithTax profile image

KeithTax 4 years ago from Wisconsin Author

I am not sure what your question is. Social Security is increased each year if there is inflation. The last several years had no inflation and so there was no increase. Also, even if SS is increased, Medicare premiums may take the whole amount. Hope I answered the right question.


my father is 69 years old i just want to asked at what age the sss pention will increase and how many percent 4 years ago

i just want to know the answer of my question that at what age my father sss will increase his pention and how many pecent it is he start to received a petion exactly 60 years old

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