You May Be Getting More From Social Security Than You Think

If you’re like many Americans, Social Security will represent a primary source of income for you in retirement, along with whatever funds you’ve been able to save in workplace or other retirement accounts.

Given its importance as a key source of your retirement income, having an accurate estimate of how much money you’ll get from Social Security each month is an important part of financial planning.

The good news is that it’s easy to figure out exactly how much you’ll get — and there are steps that you can take to increase that amount. Here’s what you need to know:

Many Americans Underestimate How Much They’ll Get

Many Americans underestimate the amount of money they’ll receive from the government in their golden years.

A new study from the National Bureau of Economic Research found that older Americans underestimate the amount that they’ll receive in Social Security by $1,896 per year, or 11.5%.

While that could inspire those workers to save more toward retirement, it might also prompt an unnecessary level of anxiety.

Get Your Payments Estimate Online

The Social Security Administration determines your benefit based on your 35 highest-earning (inflation adjusted) working years. You can find out how your payments stack up by visiting and entering your info into a calculator.

“You’ll enter in your Social Security information and see all of your earnings history since the first day you began working, and it will show your current expected value based on your working years,” Andrew Briggs, wealth manager at Plaza Advisory Group Inc., affiliated with Steward Partners, says.

[Read: Retirement Plan Options for the Self-Employed.]

The Longer You Wait To Claim Benefits, the More You’ll Get

One surefire way to increase the monthly amount you receive from Social Security is to wait until your full retirement age — or later — to claim benefits.

Most current workers are eligible to receive reduced benefits starting at age 62. But every year you wait until your full retirement account age (67 for most people) could increase your monthly benefit by 8%. If you’re able to wait until age 70, you can get even more.

[READ: 10 Reasons to Delay Retirement]

Another way to increase the amount your benefit is to add working years, Catherine Collinson, chief executive officer and president of Transamerica Institute and Transamerica Center for Retirement Studies, says.

The Social Security formula factors in your highest-paid years of employment, so if you had some low-paid years in your career or years when you didn’t work, you could boost that average by remaining in the workforce longer.

“Any years that you did not work count as zero in the calculation,” Collinson says.

“So, if you’re 65 and only have 30 years of work history, consider working an additional five years. That will increase your earnings history and get you to age 70, which is when you’ll get the maximum benefit,” she says.

[READ: What Raising the Retirement Age to 70 Would Mean for Social Security]

Social Security Is Unlikely to Disappear

Even workers who have an accurate estimate of their Social Security payments may worry that amount could go down if the Social Security trust funds run out of money. A March report from the Treasury found the funds would no longer be able to pay full benefits starting in 2033.

The report said that if nothing changes, the trust funds would have to reduce payments to 77% of their current levels. That said, it’s likely that Congress will make changes to the system before then, closing the gap by raising taxes or reducing benefits — or both.

Those changes likely won’t impact most current retirement savers. When the trust funds faced a similar situation in 1983, Congress put gradual changes in place that ensured anyone claiming benefits in the next 17 years wouldn’t be impacted.

“Using history as a guide, there shouldn’t be any impact on people who are retiring by 2033 or who are close to that,” Jim Blankenship, founder and principal at Blankenship Financial Planning Ltd. in New Berlin, Illinois, says.

More from U.S. News

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You May Be Getting More From Social Security Than You Think originally appeared on

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