Boost Your Social Security by $450 : A significant portion of retirees’ income comes from Social Security. Cost of Living Adjustment (COLA) increases, which aim to keep up with inflation, are familiar to most people.
In addition to earning credits after retirement, retirees can ensure an additional increase to their Social Security payments in a lesser-known but equally effective way.
An increase in benefits of $450 or more per month could result from this method.
Social Security Benefits and Post-Retirement Earnings
Boost Your Social Security by $450 : It’s possible to continue working after retirement and earn additional income. Your Social Security Administration (SSA) reviews your earnings records every year to determine if your new income is higher than last year’s. Your benefits will be recalculated based on your highest-earning years if this is the case.
Here’s how it works:
Social Security benefits are calculated based on your highest 35 years of income. The SSA will adjust your benefits if your post-retirement earnings exceed your 35 highest earning years.
The result could be a higher monthly benefit, which could be significant, sometimes up to $450 or more depending on your income and work history.
As an example, if your highest-earning year before retirement was $40,000 and you earn $50,000 in a post-retirement job, your benefits may be recalculated based on $50,000. Over time, this increase will provide additional income.
Factors That Affect the Increase
Working after retirement can increase your income based on several factors:
- Your benefits are reduced if you retire before your full retirement age (FRA). If you work during this time, your earnings will be higher and your benefits will be recalculated, so the impact could be mitigated.
- Those with gaps in their employment history or those who worked part-time for many years may benefit substantially from post-retirement employment.
- If you earn more than the earnings limit -$21,240 in 2024 – Social Security may temporarily withhold part of your benefits until you reach your FRA.
Increased potential earnings, for example
A $450 increase in monthly income could be achieved by working after retirement as follows:
| Scenario | Before Working Post-Retirement | After Working Post-Retirement |
|---|---|---|
| Highest 35-Year Earnings Average | $45,000/year | $55,000/year |
| Monthly Social Security Benefit | $2,200 | $2,650 |
| Total Monthly Increase | N/A | +$450 |
A worker who worked post-retirement increased his or her income by $10,000 per year, which resulted in an increase of $450 per month in Social Security.
Powerful Reasons to Use This Method
In contrast to the COLA method, this method allows retirees to receive permanent increases in their Social Security benefits. An income boost after retirement is more substantial than COLA, which fluctuates based on inflation.
According to projections, the COLA for 2025 will be between 2.5% and 3%. This would result in smaller increases, usually ranging between $50 and $80 per month for the average retiree.
Final thoughts
Boost Your Social Security by $450 : By working after retirement and boosting your lifetime earnings, you can receive a $450 Social Security increase without relying on COLAs.
In retirement, retirees can use this method to provide themselves with a substantial financial cushion, especially if they wish to work part-time or earn additional income.
You can increase your retirement benefits and achieve greater financial security by maximising your earnings during the post-retirement years.
