How to increase income from Social Security

Building a good retirement plan is like constructing a pyramid. It’s hard to design the top layers unless you know the size and strength of the base.

For most retirement savers in the United States, that base is Social Security. Problem is, despite the important role Social Security plays for retirees, most people don’t understand their actual benefits. According to the 2025 TIAA Institute-GFLEC Personal Finance Index survey, for instance, only 42% of respondents could answer a basic question about how monthly Social Security benefits are calculated.¹

“The survey is worrisome because Social Security remains a vital source of retirement income for the majority of Americans,” says Surya Kolluri, head of the TIAA Institute. “It’s hard to know how much you need to save if you don’t understand what you’re starting with.”

With that in mind, here are three things every retirement saver should know about their Social Security benefits.

1. Monthly benefits are based on your lifelong earnings, not your final salary

The majority of Americans mistakenly believe that the amount they’ll receive in Social Security is tied to how much they earn in their final two years of full-time employment, according to the P-Fin Index survey. In reality, the Social Security Administration’s (SSA) benefits formula takes into account all (or nearly all) of your work history. The formula considers average pay during the 35 years when you earned the most, indexed for inflation.

This is an important distinction, especially for older workers who may want to try something new for their final act. Perhaps they're eyeing a lower-stress position with their current employer or a mission-driven role with a nonprofit. Either way, older workers are more likely to delay retirement if they can choose their work hours more flexibly, research shows²—which may mean accepting lower pay in exchange. The good news: This sort of job switch probably won't have a material impact on Social Security benefits.

2. There are financial benefits to delaying Social Security claims

Let’s say you were born in 1962 and are now weighing three options:

1. Retire with full Social Security benefits in three years when you turn 67 (now considered “full retirement age” for those born in 1960 or later).
2. Retire in three years—but don’t take Social Security until age 70, using other savings to fill the gap.
3. Work another six years, then retire and take Social Security when you turn 70.

Obviously, “option 1” will be the right choice if you need the money and don't want to keep working. But if your retirement plans are flexible, the financial benefits to delaying Social Security—to choosing option “option 2” or “option 3”—are substantial. Each year you delay, your future monthly benefit will increase by 8%. That could be the difference between a monthly Social Security benefit of $2,000 versus $2,480. (Log into your SSA account to find out your exact benefits. You can also explore different scenarios with our Social Security tool.) Moreover, assuming the SSA continues to pay annual cost of living adjustments (COLAs) tied to inflation, your future COLAs will be bigger since they will be calculated using the higher monthly benefit.

3. Coordinating Social Security benefits may make sense for married couples

Dual-income couples earn separate Social Security benefits, and those benefits don't need to be claimed at the same time. Consider married couple Ron and Kendra. They have been conscientious savers, and they are both eligible for Social Security benefits based on their work histories. (To keep things simple, Ron and Kendra are the same age.)

The spouse with lower earnings—let’s say Ron—starts taking his benefits at age 67, while higher-salaried Kendra chooses to delay taking hers until age 70. Though Social Security benefits are lower for those who claim at 67, Ron and Kendra are still getting a monthly check at 67, while also allowing Kendra to max out the benefit she’ll get by waiting to claim until age 70.

Here’s one more wrinkle to consider. Let’s say Kendra’s monthly benefit at age 70 will be $2,728 whereas Ron’s benefit at 67 is only $1,000. Once Kendra starts taking Social Security at 70, Ron's benefit will increase to $1,100—the higher between his own benefit ($1,000) and his spousal benefit, which equals half of Kendra's full retirement age benefit ($2,200) at age 67.

Our advisors are here to help

If you need help understanding Social Security benefits and how they fit into your retirement plan, talk to your TIAA advisor. Don’t yet have an advisor? Schedule an appointment.