The figures for average Social Security benefits in the United States might come as a surprise to many people.
Certainly, the benefits are more modest than many people think. The average monthly check last year was about $1,514, or $18,170 annually.
And this was just the average. The average aged widowed or disabled worker draws slightly less than that.
Currently, Social Security benefits make up for about 40 percent of past income for adults who earn at average income levels all their lives and retire at age 65.
However, due to the rising retirement age, the replacement rate for an average earner will slip to about 35 percent.
Do you feel short-changed because of the complex Social Security benefits system? How can you nudge your benefits above the average levels?
Read on for some tips that can help you reinforce your retirement benefits.
Work long enough
One of the better ways to drive your Social Security benefits up is to ensure a long working career of contributing to the program. You must put in 35 years of paying into the system to derive the maximum benefits as the program calculates your Social Security benefits based on your best 35.
Be wary of the fact that your non-working years where your income might be zero, can have a detrimental effect on your average earnings.
If you have a couple of zero years due to lost jobs, pregnancy or schooling, working a year or two longer can offset those and raise your benefit.
Claim later if you can
You can derive maximum benefits if you stretch your career up to the age of 70. The minimum threshold when you can start collecting benefits is 62, but the longer you hold off your claims the bigger the rewards you can claim in monthly benefits.
Each extra year that you manage to hold off after your retirement age can see your benefit amount expand by 8 percent.
Look for inaccuracies
Any mistakes or omissions in your records can have an adverse effect on your Social Security benefits. Be sure to log on to the agency’s website and crosscheck all the information concerning you and your earnings in your account.
Input errors are not uncommon due to complicated calculations based on complex data and multiple variables. These mistakes can reduce your payments.
Federal income tax can eat into part of your Social Security benefits because of complex calculations. Plan to avoid tax snares.
For example, you can benefit by shifting savings into a Roth IRA, as Roth withdrawals do not count towards your taxable income.
Claim poverty benefits
The poorest elderly, age 65 and older, can use supplemental security income (SSI) benefits if their income and assets are below minimum threshold levels. These levels are different in different states across the country.
Americans below the age of 65 qualify for SSI benefits if they suffer from severe disability or blindness.
According to the Social Security Administration, a person with assets below $2,000 or a couple with assets below $3,000 (not counting a home) qualifies for SSI benefits.
Get a second opinion
Social Security benefit calculations involve a lot of complexities. Do not work on assumptions.
In case you are not satisfied with the interpretation of one Social Security office do not hesitate to double-check by heading to another office.