Boost Your Social Security Checks by Over 20% – Here’s How to Make It Happen

When you start receiving Social Security benefits, the amount you receive each month isn’t set in stone. Several factors can influence the size of your check over time, and knowing these factors is key to maximizing your benefits. One of the most critical decisions you’ll face is choosing the right age to begin claiming your Social Security retirement benefits, as this decision significantly impacts your financial security in retirement.

Claiming

Claiming Social Security benefits before reaching full retirement age (FRA) usually results in a lower monthly payment. On the flip side, delaying your benefits until after your FRA can significantly increase the amount you receive each month. The difference between claiming benefits at age 62 versus waiting until age 70 can result in a substantial 77% increase in your monthly benefits. This difference makes timing one of the most important factors to consider when planning your retirement.

Factors

Your lifetime earnings are a crucial factor in determining your Social Security benefit amount. The Social Security Administration (SSA) calculates your benefit by reviewing your earnings history, adjusting for wage inflation. The SSA identifies your 35 highest-earning years, averages those earnings, and divides the sum by 12 to calculate your average indexed monthly earnings (AIME). The higher your AIME, the larger your monthly benefit will be.

Year of Birth

Your year of birth determines your full retirement age (FRA), the age at which you can claim your full Social Security benefits. For those born in 1954 or earlier, the FRA is 66. If you were born after 1954, the FRA gradually increases by two months each year until it reaches 67 for those born in 1960 or later. Your FRA plays a significant role in deciding the optimal time to claim your benefits.

Age at Claiming

The age at which you decide to claim Social Security benefits directly impacts the amount of your monthly check. Claiming benefits before reaching your FRA results in a reduced amount. Conversely, delaying benefits beyond your FRA earns you delayed retirement credits, which increase your monthly benefit by two-thirds of a percent for each month you delay, up until age 70.

For example, if you delay your benefits until age 70, you could see an increase in your monthly payment by 24% to 32%, depending on your year of birth. Even if you’ve already claimed your benefits early, you still have an opportunity to increase your payments through delayed retirement credits.

Strategy

One effective strategy to potentially boost your Social Security benefit is by requesting the SSA to suspend your benefits. This lesser-known option allows you to temporarily stop receiving your monthly payments while continuing to accumulate delayed retirement credits. These credits will then be applied when your benefits resume, resulting in a higher monthly check.

You are eligible to suspend your benefits at any point after reaching your FRA. Once the SSA approves your request, the suspension takes effect from the following month. If you don’t resume benefits before age 70, they will automatically restart at that time, allowing you to take full advantage of the delayed retirement credits.

Considerations

Before deciding to suspend your benefits, it’s important to consider the impact on others who may be receiving benefits based on your earnings record, such as a spouse. If your benefits are suspended, your spouse’s benefits will also be suspended during this period, unless they are a divorced spouse. This could significantly affect your household income, so it’s crucial to weigh this factor carefully.

Medicare Premiums

Another consideration is how suspending your benefits will affect your Medicare Part B premiums. Typically, these premiums are deducted directly from your Social Security payments. If you suspend your benefits, you’ll need to pay these premiums out of pocket. Make sure to budget for this expense if you choose to temporarily halt your benefits.

Final Thoughts

Maximizing your Social Security benefits requires careful planning and a solid knowing of the factors that affect your monthly payment. By knowing when to claim your benefits and considering strategies like benefit suspension, you can significantly increase your financial security in retirement. Always consider how your decisions will affect both your individual finances and those of your dependents, and consult with a financial advisor if needed to make the best choice for your situation.

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