Maximize Your Social Security – 3 Essential Steps for a Higher Retirement Benefit

The Social Security Administration (SSA) recently announced a 2.5% cost-of-living adjustment (COLA) for 2025. This increase is lower than the recent COLAs, and many seniors may find it disappointing. Unfortunately, the way Social Security calculates COLAs, using the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W), often does not accurately reflect seniors’ true living costs. Over time, this approach has eroded Social Security benefits, leading many seniors to lose buying power.

If you’re concerned about how future COLAs may impact your retirement, there are proactive steps you can take now to increase your monthly Social Security benefit. Here’s how you can strengthen your financial position in retirement.

COLA

The primary issue with Social Security COLAs lies in the method used to calculate them. Currently, the SSA bases COLA increases on the CPI-W, which measures cost increases for urban wage earners, not retirees. Consequently, it overlooks the rising costs seniors typically face, like healthcare and housing.

A study by The Senior Citizens League found that Social Security benefits today have about 20% less purchasing power compared to 2010. Until Congress changes the COLA formula to better reflect seniors’ costs—using, for example, the Consumer Price Index for the Elderly (CPI-E)—retirees may continue to lose buying power.

Social Security Benefit

If you’re concerned that small COLAs may weaken your financial position in retirement, you’re not alone. Here are three ways to ensure a stronger starting benefit and make the most of your Social Security.

1. Work for at Least 35 Years

Social Security calculates your monthly benefit based on your 35 highest-earning years. If you haven’t worked for 35 years, the SSA will add $0 to your record for each missing year, reducing your overall benefit. If you’re nearing retirement and are short a few years, working a little longer can improve your monthly check.

For example, if you have only 33 years of earnings on record, working two more years could replace those zeros with your recent earnings, which boosts your final benefit amount.

2. Check Your Earnings Record

It’s essential to make sure your earnings record accurately reflects your income, as it’s the foundation of your Social Security benefit. Mistakes can happen, and if the SSA has any underreported income on file, your benefit may end up lower than it should be.

To keep things accurate, create an account on the SSA’s website and review your earnings report annually. If you spot discrepancies, you can reach out to the SSA to have your record corrected. Ensuring this accuracy can add real dollars to your monthly benefit once you retire.

3. Delay Your Claim Until Age 70

If you’re able to delay your Social Security claim until age 70, you can significantly increase your monthly benefit. Here’s how it works: each month you delay past your full retirement age (FRA) adds about 2/3 of 1% to your benefit. This delay increases your annual benefit by 8%, up to a maximum of 24% if you wait until 70.

Let’s say your FRA is 67, and your monthly benefit at that age is $1,500. By delaying until 70, your benefit could increase to $1,860—a difference of $360 per month, or $4,320 per year, for life.

Protecting Your Retirement

While a 2.5% COLA may not keep up with inflation, especially for seniors with rising healthcare expenses, beginning retirement with a higher monthly benefit provides a safeguard. By maximizing your Social Security income now, you set yourself up for better financial resilience, regardless of future COLAs.

If you’d like to learn more about boosting your Social Security income, consider exploring additional Social Security strategies that may help. Even small steps now can make a big difference down the road.

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