Saving for retirement is one of the most important milestones Americans need to accomplish before claiming Social Security benefits, but according to Northwestern Mutual, the average retirement savings balance for Americans across all age groups stands at $89,300. This figure, while not ideal, is understandable since many individuals still have decades ahead to save for retirement. However, it becomes concerning when examining the savings of those in their 60s, who have an average retirement savings of just $112,500.

And that figure is the average, meaning many people do not come close to that number. Unlike younger individuals, those in their 60s are often nearing the end of their careers and have limited time to bolster their savings to a level where their retirement would be comfortable enough. This situation indicates that many nearing retirement age will likely depend heavily on Social Security to cover their expenses.

If you find yourself in this scenario, maximizing your Social Security benefits becomes crucial. Here are some straightforward strategies to help increase your Social Security payouts:

1. Ensure a 35-Year Work History

This is probably the most important step you can take, although it may be hard if you have been out of work for a few years, your Social Security retirement benefits are calculated based on your highest 35 years of earnings. If your work history falls short of 35 years, any missing years will be recorded as zero income, which can significantly lower your benefits, so getting as close as possible to the 35 year number will be greatly beneficial for those who have gaps.

While many people prefer to retire early, working until you have at least 35 years of earnings can be beneficial. For those who started their careers in their mid-20s and are now in their late 50s, working a few additional years could help achieve a complete 35-year earnings history. This approach allows you to retire relatively young while ensuring your Social Security benefits are maximized.

If you’re unable or unwilling to continue working full-time, part-time work can also contribute to your earnings history. For instance, if you’re 65 and have only 34 years of earnings due to a career break, even a part-time job can fill that gap and prevent a year of zero income from being factored into your benefits calculation.

2. Verify the Accuracy of Your Earnings Record

Since the Social Security Administration (SSA) determines your benefits based on your recorded earnings history, any inaccuracies in these records can result in lower benefits.

To prevent this, regularly review your Social Security earnings statements, which are accessible on the SSA’s website. If you identify any errors, such as underreported income, promptly report these discrepancies and have them corrected. Ensuring the accuracy of your earnings record can lead to a higher monthly benefit upon retirement and doing so while the information is fresh in your mind will save more than one headache when the time comes.

3. Delay Claiming Social Security Benefits Until Age 70

Full Retirement Age (FRA) for Social Security benefits is 67 for individuals born in 1960 or later. However, you can increase your monthly benefit by delaying your claim beyond your FRA. Each year you delay, up to age 70, your benefit increases by approximately 8%.

For example, if you’re eligible for a monthly benefit of $1,800 at age 67, delaying your claim until age 70 could raise your benefit to $2,232 per month. This significant increase can help compensate for a smaller-than-desired retirement savings balance.

This is not feasible for many individuals, but if you can keep working at least part time while still waiting for your benefits, it may not be as hard, or you can hold out for a little longer. The payoff will be a lot better than if you never tried.

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