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2 Moves to Make in Your 40s to Get More Social Security in Your 60s
Key Points
Your Social Security benefits in retirement are tied to your wage history.
Growing your income could lead to larger checks.
Reviewing your earnings record could help you avoid reduced benefits due to errors.
When you're in your 40s, you may not be so interested in Social Security, since you won't be able to collect those benefits for another couple of decades. However, the moves you make (or don't make) in your 40s could actually help determine how much Social Security you collect once you're ready to retire.
If you're hoping to get more Social Security than less, here are two key moves worth making in your 40s that could lead to larger benefits in your 60s.
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1. Boost your wages
By the time your 40s roll around, you may have a nice amount of experience in your industry. That could set the stage for you to chase promotions or better jobs that lead to higher pay.
Your Social Security benefits are calculated based on your 35 highest-paid years of income. So the more money you're able to earn in your 40s, the more generous your retirement benefits might be.
2. Check your earnings record
Having an accurate wage record with the Social Security Administration (SSA) is important, since it affects your benefits formula. If the SSA is missing earnings for you, or if you have earnings that are underreported, it could lead to smaller retirement checks.
That's why you should make a point of checking your earnings record every year. You can do so by creating an account at SSA.gov and accessing your earnings statements.
If any of that information looks wrong, you can work with the SSA to get it updated. You may have to provide tax returns, W-2s, and other documentation to get your wage record corrected. It's best to check each year so that if you need to dig up that information, you're more likely to have it or know where to get it.
Another advantage of checking your earnings record? You can get an estimate of your future Social Security benefit.
The closer you are to retirement, the more accurate that estimate is apt to be. But the number you see in your 40s can serve as a baseline, which could help with your retirement planning.
Social Security may end up being an important source of income once your career comes to an end. Even though you may not be eligible for benefits for quite some time, it pays to keep Social Security on your radar in your 40s. Growing your paycheck and keeping tabs on your earnings record could set the stage for larger benefits when you need them.
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