The wonderful thing about Social Security is that it is guaranteed to give you a monthly payment for life. And the bigger that benefit, the better your financial freedom will be during retirement.
Many seniors are sometimes disappointed when they see that their benefits cannot cover all their bills. To be certain, it was never created to replace your paycheck fully. But many people run into issues when they see what their low buying power gets them.
And it is this reason why it pays to do everything you can to get more out of Social Security. And one move could result in a 24% higher benefit.
Want 24% more Social Security?
You might know that you are entitled to your complete monthly Social Security benefit, depending on your personal income history, once you get to the full retirement age, also known as your FRA. FRA is dependent on your birth year, if it was 1960 or after, it is 67.
You are allowed to get benefits before FRA, or after. The earliest you can get Social Security is 62, but for every month you do, your benefits are reduced.
The opposite occurs if you delay your filing for Social Security. For every month you wait, your benefit will go up by around 2/3 of 1%. That means that for every year you postpone your sign up, your benefits will go up by 8%.
Once you get to 70, you can no longer get the delayed retirement benefits that boost your benefits up. But if your FRA is at 67 and you delay your Social Security filing until you are 70, you will get a 24% boost to your monthly income that will stay in place throughout your entire retirement.
Or, to say it another way, if you are entitled to $1,500 per month after 67. Waiting until you are 70 to start social security will give you $1,860 per month instead. That is an annual income increase of $4,320.
If you do not have another source of income that is not Social Security, another $4,320 per year is very important. And even if you don’t have income besides your benefits, another $4,320 per year might mean getting one more vacation every year of retirement, or getting that much more money to use on hobbies and other things.
Author: Scott Dowdy