Maximizing Social Security benefits is crucial for a financially secure retirement. By employing specific strategies, it’s possible to increase your Social Security checks by more than 20%.
This article will explore the steps you can take to achieve this goal, including understanding key factors that influence your benefits and leveraging a lesser-known method to enhance your monthly income.
Key Factors About Social Security Checks
To effectively increase your Social Security benefits, it’s important to understand the three primary factors that influence the amount you receive:
- Lifetime Earnings: The Social Security Administration (SSA) calculates your benefits based on your 35 highest-earning years. Maximizing your earnings during these years directly impacts your Social Security check.
- Full Retirement Age (FRA): The year you were born determines your FRA, which is when you can claim full Social Security benefits. For most people, this age is between 66 and 67.
- Claiming Age: The age at which you start claiming benefits is critical. Claiming before your FRA results in reduced benefits, while delaying past your FRA increases your benefits by up to 8% per year until age 70.
The Strategy to Increase Benefits by Over 20%
One effective strategy to increase your Social Security benefits is suspending your benefits after reaching your FRA.
By suspending your benefits, you allow delayed retirement credits to accumulate, which can increase your monthly benefit by as much as 8% per year.
If you suspend benefits from your FRA until age 70, you can see an increase of over 20% in your Social Security checks.
Important Considerations
Before deciding to suspend your benefits, consider the following:
- Impact on Spousal Benefits: If a spouse or dependent is receiving benefits based on your record, suspending your benefits will also suspend theirs.
- Medicare Premiums: If you’re enrolled in Medicare, you’ll need to pay your Part B premiums out of pocket, as they are typically deducted from your Social Security payments.
Potential Increase in Benefits by Delaying Claiming
| Claiming Age | Increase in Benefits (%) |
|---|---|
| 62 | 0% (Baseline) |
| 66 | ~32% |
| 70 | ~76% |
Conclusion
Increasing your Social Security benefits by over 20% is achievable through strategic planning, particularly by understanding the factors that affect your benefits and by considering the suspension of benefits to accumulate delayed retirement credits.
With careful consideration, you can significantly boost your monthly income in retirement.
FAQ’s
1. What is the Full Retirement Age (FRA)?
The FRA is the age at which you can claim full Social Security benefits, typically between 66 and 67, depending on your birth year.
2. How much can delaying benefits increase my Social Security checks?
Delaying benefits past your FRA can increase your monthly check by up to 8% per year, resulting in a 24%-32% increase by age 70.
3. Can I suspend my Social Security benefits after I’ve started receiving them?
Yes, if you have reached your FRA, you can suspend benefits to accumulate delayed retirement credits.
4. Will suspending benefits affect my spouse’s benefits?
Yes, if your spouse or dependents receive benefits based on your record, their benefits will also be suspended.
5. How do I request a suspension of my Social Security benefits?
You can request a suspension by contacting the SSA directly. The suspension will take effect from the following month.
