3 smart ways for baby boomers to increase their Social Security benefits in 2024
For most retired Americans, Social Security benefits are an essential source of income. An annual survey conducted by national pollster Gallup for more than 20 years found that 80 to 90 percent of retirees at the time relied on some degree of salary to cover expenses.
Considering how important Social Security is to the financial well-being of our nation’s aging workforce, it’s ideal to take full advantage of America’s best retirement program. This is especially true for baby boomers, who, based on their year of birth (Americans born between 1946 and 1964), are facing one of the biggest decisions of their lives. When to claim retired worker benefits.
As we prepare to welcome the new year, here are three particularly smart options for baby boomers to increase their Social Security benefits in 2024.
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be patient
Sometimes the easiest and smartest way is to simply sit with your hands. That’s why being patient is the first choice baby boomers can make to boost their Social Security checks in 2024.
The Social Security Administration (SSA) uses four factors when calculating a worker’s payment:
This fourth component, age, is likely to sway the payout pendulum more than any other factor. Eligible workers who earn the 40 lifetime credits needed to receive Social Security benefits can receive monthly payments starting at age 62, but there’s a pretty big incentive for those who are patient.
Starting at age 62 and continuing through age 69, Social Security retirement benefits can increase by up to 8% per year for those willing to wait. Workers who claim benefits before reaching full retirement age (i.e., the age at which eligible workers are entitled to 100% of their benefits) can expect a permanent monthly reduction of up to 30%, depending on their year of birth. Meanwhile, waiting until age 70 (i.e., the year benefits stop being paid) can result in monthly benefits that are 24% to 32% higher than what a retiree would have received at full retirement age.
As shown in the table below, the difference in monthly payments depending on your claiming age can be significant.
| birth year | 62 years old | 63 years old | 64 years old | 65 years old | 66 years old | 67 years old | 68 years old | 69 years old | 70 years old |
| From 1943 to 1954 | 75% | 80% | 86.7% | 93.3% | 100% | 108% | 116% | 124% | 132% |
| 1955 | 74.2% | 79.2% | 85.6% | 92.2% | 98.9% | 106.7% | 114.7% | 122.7% | 130.7% |
| 1956 | 73.3% | 78.3% | 84.4% | 91.1% | 97.8% | 105.3% | 113.3% | 121.3% | 129.3% |
| 1957 | 72.5% | 77.5% | 83.3% | 90% | 96.7% | 104% | 112% | 120% | 128% |
| 1958 | 71.7% | 76.7% | 82.2% | 88.9% | 95.6% | 102.7% | 110.7% | 118.7% | 126.7% |
| 1959 | 70.8% | 75.8% | 81.1% | 87.8% | 94.4% | 101.3% | 109.3% | 117.3% | 125.3% |
| After 1960 | 70% | 75% | 80% | 86.7% | 93.3% | 100% | 108% | 116% | 124% |
Data source: Social Security Administration.
work one more year
A second smart choice baby boomers can make to increase their Social Security benefits in 2024 is to stay in the labor market for one more year.
As previously noted, SSA considers four factors when calculating Social Security benefits for retirees: The first of these two components, employment records and earnings records, are linked at the hip.
SSA considers your 35 highest-earning years, adjusted for inflation, when determining your monthly check. The more you earn on average over your lifetime, the more likely you are to receive monthly payments from Social Security during retirement.
However, an important point to note is that mature workers tend to have higher average annual salaries than younger workers. Workers in their 60s are likely to have more experience in their field and therefore may earn higher salaries or wages.
According to data from the U.S. Bureau of Labor Statistics for the third quarter of 2023, the average annual earnings of full-time or salaried workers ages 55 to 64 and 65 or older were $63,544 and $58,656, respectively. This compares to an average annual income of $38,012 for workers ages 20 to 24 during the third quarter.
By working one more year, baby boomers are likely to eliminate one of the lower-income, inflation-adjusted years from their childhood and replace it with a higher-income year. When SSA finally calculates your monthly benefit, that amount will gradually increase.
Image source: Getty Images.
Rely on Social Security’s do-over provisions
A third smart way for selected baby boomers to increase their Social Security benefits in 2024 is to rely on a little-known cancellation provision: SSA-521 (officially known as a “request to withdraw application”).
Historically, most retirees began receiving Social Security payments before their full retirement age. Nearly two-thirds of current retirees have had their monthly payments permanently reduced due to early claims.
Many of these initial claims were filed with purpose, but some early filers regret their decisions. This is where SSA-521 can come into play.
SSA-521 is a request to cancel your Social Security retired worker benefit claim. If approved by SSA, your initial claim will be canceled and your benefits will begin to accrue again, up to 8% per year until age 69. Claim early that you have regrets and then pay immediately.
However, SSA-521 has some drawbacks that baby boomers should be aware of. First of all, you can only submit this request up to 12 months after you have been approved for benefits. If you have been receiving benefits for several years, unfortunately, SSA-521 is not an option.
Likewise, this Social Security mulligan is a one-time issue. You cannot stop and start benefits on multiple occasions. This is a one-time measure that gives early claimers the opportunity to increase their monthly Social Security benefits through patience.
Finally, if SSA approves the request, workers must repay any benefits they received from Social Security. Keep in mind that this includes any benefits your spouse or children may be entitled to based on your earnings history.
