Beat Your Average Monthly Social Security Benefit of $1,661 With This Secret Strategy | Smart Change: Personal Finance
Social Security benefits can be a lifeline for many seniors, but it can be tough to survive monthly checkups alone. The average retiree only receives about $1,661 a month in benefits, which is just over $20,000 a year.
Fortunately, there are ways to increase the size of your monthly payments. And one strategy, in particular, can boost your benefits by hundreds of dollars per month.
How does your age affect your benefit amount
The earliest you can start claiming Social Security is age 62, but you can also file at any age after that. While waiting longer to start receiving benefits may not sound ideal, you will receive larger checks each month the longer you wait (up to age 70).
To receive the full benefit amount you are entitled to based on your earnings history, you will need to file at your full retirement age (FRA) – which is between 66 and 67, depending on the year you were born.
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If you apply as soon as possible at age 62, your benefits will be reduced by up to 30%. But if you delay claiming benefits until age 70, you will receive the full benefit amount plus up to an additional 32% each month. In some cases, it can reach several hundred dollars a month.
For example, let’s say you have a FRA of 67, and you will receive $1,661 per month by enrolling in that lifetime. If you were to claim age 62, your benefit amount would be reduced by 30%, leaving you around $1,163 per month. Wait until 70, and you’ll get a 24% bonus on top of the full vesting amount, or roughly $2,060 per month. That’s roughly $900 more per month than if you were claiming 62.
Also keep in mind that once you are claimed, the amount of the benefit is generally restricted for life (excluding annual cost-of-living adjustments). This means that if you claim early, your benefit amount will be permanently reduced. But if you delay benefits, you’ll earn bigger checks for the rest of your life.
Is delaying benefits the right move for you?
Waiting a year or two to file Social Security can have a significant impact on the amount of your monthly benefit. But it is not the right strategy for everyone.
Delaying Social Security is often the best move for those who want to maximize their monthly income. The difference between registering at age 62 and waiting until age 70 can change the lives of some seniors, so consider whether your savings are insufficient.
In some cases, it may be best for you to claim in advance. For example, if you have reason to believe that you may live a shorter-than-average life, it may not make sense to delay Social Security. Depending on how long you live, you will likely receive more over the life course if you apply for benefits earlier.
There is no one-size-fits-all answer as to when you should begin claiming Social Security, but it is important that you understand all of your options. Deferring benefits isn’t right for everyone, but it can dramatically increase the size of your monthly payments — making it easier for you to enjoy a more comfortable retirement.
The $18,984 Social Security Bonus Most Retirees Totally Forgot
If you’re like most Americans, you’re behind on retirement savings for a few years (or more). But a few little-known “Social Security secrets” can help ensure a higher retirement income. For example: One easy trick can pay you up to $18,984 extra…every year! Once you learn how to maximize your Social Security benefits, we believe you can retire with confidence with the peace of mind we all seek. Simply click here to discover how to learn more about these strategies.
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