Social Security is a vital part of life for those who have finished their working life and are living, having paid into retirement for many years. Many Americans benefit from this program, but many people are unaware of a little trick that can increase your monthly payments if you apply certain “strategies” (let’s call it that).
With inflation on the rise, it’s more important than ever to be bold and secure the maximum benefit possible. Read on to learn how you can do it too.
Decide the right time to claim your retirement
One of the most effective strategies to increase your Social Security payments is to carefully decide when to claim your benefits. Claiming payments at the minimum age allowed, which is currently 62, can significantly reduce the monthly amount, since you will only receive a portion of what you would be entitled to if you waited until your retirement date. Here’s an example:
If you start receiving Social Security payments at age 62, you could receive approximately $1,465 per month.
BUT, if you wait until you reach Full Retirement Age (FRA, which is currently 66 years and 8 months for those born in ’59, and 67 years for those born after this year), your benefits could increase to $2,119 per month!!
But even better, if you decide to delay your retirement until age 70, you could receive an even higher amount, reaching up to $2,634 each month!!
In other words, if you wait until Full Retirement Age you can increase your payments by up to 44%! A huge difference that could make a huge difference in your quality of life during retirement. Who wouldn’t like their pension to be 44% higher than expected? Of course, you will have to work a little harder but… the rewards will be worth it.
How is each income calculated?
The SSA considers your retirement payment based on your highest-earning 35 years of work, so if you work less than this amount of time, the years without income are recorded as “0”, so it is normal for your monthly payment to be reduced. So, it is obvious that if you have only worked 10 years, your payments will be considerably lower than someone who has worked all their life.
How can someone maximize their income then?
The SSA sets a limit on monthly and annual salary subject to taxes, although it is true that the higher the recorded income, the higher the retirement payment will be, to obtain the maximum payment in 2025 (which will be $5108!!), you would need to have worked for 35 years and have constantly contributed to the SSA.
I don’t have 35 years of contributions… what can I do?
Now, the SSA has established that for those people who delay their retirement age until age 70 (remember that it is currently 67 years old) it will make your benefits after your working years increase by 8%! It is a decision that you have to think very carefully, but, here is an example of a calculation in case it sheds some light on this issue:
– Retired at age 62: receives $1465 per month
– Retired at age 67 (FRA): receives $2119 per month
– Will retire at age 70: Will earn up to $2634 per month.
So, you already know all the facts about retirement, now it’s up to you to decide at what age you want to retire and how much you want to see in your account each month during this golden age. Remember: planning your retirement is only up to you, as it will be your time to rest after years of hard work.