How to Beat the Average $1,661 Monthly Social Security Benefit

Settling for average can threaten your future financial security. Storyteller and entertainer Garrison Keillor is famous for his tales of Lake Wobegon “where all the women are strong, all the men are good-looking, and all the children are above average.” Most of us like to think we’re above average in many regards — our looks, our driving, our IQ, and more. We can’t change some things about ourselves, like our IQs, in order to be above average, but other things we can — and here’s an important example: Social Security benefits. The average monthly Social Security retirement benefit was recently just $1,661 per month, or about $20,000 annually. Fortunately, there are some things that you can do that might make your benefits more than that. Here are three.

1. Delay starting to collect your benefits

For starters, you can delay starting to collect your benefits. Each of us has a “full retirement age” (FRA), which is 66 or 67 or somewhere in between for most of us. It’s the age at which we can start receiving the full benefits to which we’re entitled, based on our earnings record. We can start collecting as early as age 62, though, and as late as age 70. Start collecting early, and your checks will be smaller, but you’ll receive many more of them, making an early start not as terrible as it might seem. For those in poor health or with a shorter expected life span — or simply those who need more income as soon as possible — starting to collect early can make plenty of sense. If you stand a decent chance of living a longer-than-average life, and you can delay starting to collect your benefits, they’ll increase by about 8% for every year beyond your full retirement age — up to age 70. So delaying from age 67 to age 70 can make those checks 24% bigger.

2. Earn more while you’re working

Next, aim to earn more. That $1,661 benefit is for those with average earnings. You only have to have earned more than 50% of beneficiaries in order to receive a bigger check than that. So think about ways to earn more. You might take on a side hustle for a few years — or for many years. That doesn’t have to be a drag, either. You might drive and deliver meals from restaurants to those who have ordered them online, or you might give guitar lessons to local kids (assuming you know how to play the guitar). Doing freelance work that you find at online freelancing marketplaces is another option as is making and selling crafts online. Then there’s your primary job. Ask for a raise at least every few years. (And, for best results, deserve one.) If that doesn’t work, or if you don’t love your current job, look for another, better-paying one. You might even earn an additional credential or degree to qualify you for a better or completely different kind of job or career.

3. Work longer

Finally, work longer. The formula that determines your Social Security benefits averages your earnings in the 35 years in which you earned the most (adjusting them for inflation, of course). So if you have only worked for 30 years when you stop working, the calculation will factor in five zeroes. Try to work for at least 35 years. Better still, once you’ve worked for 35 years, if you’re earning a lot more than you’ve earned before (again, on an inflation-adjusted basis), consider working for a few more years because each high-earning year will kick your lowest-earning year out of the calculation. Those are some of many effective ways to increase your Social Security benefits. Look into which ones make the most sense for you because a fatter check that arrives every month (and even gets adjusted for inflation) will make your retirement years that much more secure.