1) Work at Least the Full 35 Years. The Social Security Administration (SSA) calculates the amount of benefit based on your lifetime earnings. The SSA adjusts your income to take into account changes in average earnings over the years you have received income.
2) Delay Benefits and Max Out Earnings. Early retirees are looking for ways to boost their income, and the SSA calculates benefits based on income. The more you earn, the higher your benefit will be, but the lower your income, the less you will get. Most people know the age at which they can claim their full benefits, but for most people retiring today, the Full Retirement Age age is 66.
But very few people know that delaying benefits until after they reach the full retirement age can effectively earn an 8% annual return on their available benefits.
For example, you’re eligible for a primary insurance amount (PIA) of $2,000, or $24,000, at age 66, then by waiting until age 70, your annual benefit would increase to $31,680. Cumulatively, you would increase your total benefits from $378,000 received by your life expectancy at age 82 to $411,000. However, it’s important to keep in mind this doesn’t account for cost-of-living-adjustment.
3) Claim Spousal Benefits and Delay Yours
If you and your spouse were born on or after January 2 1954 and you both have reached full retirement age, you can claim spousal benefits and continue to increase your own benefits.