Social Security benefits are a form of retirement income provided by the U.S. government. They are funded through payroll taxes and are designed to provide a basic level of income to retirees, disabled individuals, and surviving spouses or children of workers who have died.

Social Security benefits are calculated based on your earnings history and the age at which you begin receiving benefits. Your earnings history is used to determine your average indexed monthly earnings (AIME), which is then used to calculate your primary insurance amount (PIA). Your PIA is the amount you will receive each month if you begin receiving benefits at your full retirement age. If you begin receiving benefits before or after your full retirement age, your benefits will be adjusted accordingly.

While your Social Security benefits are primarily based on your earnings history, there are some smart investment decisions you can make that may help increase your benefits. For example, if you delay taking your benefits until after your full retirement age, you can earn delayed retirement credits that will increase your monthly benefit amount. Additionally, investing in tax-advantaged retirement accounts like 401(k)s or IRAs can help boost your retirement income and may reduce your taxable income, which can also impact your Social Security benefits.

In addition to delaying your benefits and investing in tax-advantaged retirement accounts, there are other ways to maximize your Social Security benefits. For example, working for at least 35 years can help ensure that your earnings history is as high as possible, which can increase your monthly benefit amount. Additionally, coordinating your benefits with your spouse’s benefits can help you both maximize your combined benefits. Finally, seeking out professional advice from a financial planner or Social Security expert can help you make informed decisions about your retirement income strategy.