For many older Americans, Social Stability is a significant source of income, so making wise decisions about whether to claim benefits might be the key to financial security.
More money from Social Security might make a major impact on the quality of life for folks who are anxious about having enough money to live on after they’ve stopped working.
The good news is that the choices you make might have a significant influence on your annual revenue.
In fact, if retirees make the correct decisions in their later years, they might wind up with an additional $10,000 per year in Social Security income.
Here’s how the average retiree may collect an additional $10,740 in Social Security payments per year
So, how could the average senior receive an additional $10,000 in Social Security benefits each year? It’s straightforward. To get your first check, you’d have to wait until you’re 70 years old.
You can start collecting benefits at the age of 62, and you can retire at any time between the ages of 66 and four months and 67. If you receive your first payment at your FRA,
it will be a percentage of the average amount you earned over the 35 years when your (inflation-adjusted) wages were at their peak. You can also defer your checks until you’re 70 years old.
Because early filing penalties apply, if you start benefits at 62 or before FRA, your regular benefit will be reduced. You’re basic benefit increases if you start benefits after FRA since you can accumulate delayed retirement credits up to the age of 70.
If you begin payments within 36 months after FRA, the benefits will be reduced by five-ninths of one percent every month. This equates to a 6.7 percent yearly decrease.
If you start receiving checks even sooner, an extra monthly penalty of 5% will reduce your monthly payment even further. This amounts to a 5% reduction in yearly benefits.
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Deferred retirement credits raise monthly payments by two-thirds of one percent, resulting in an annual increase of 8% in your regular benefit.
If you had a full retirement age of 67 and claimed your benefits five years early at 62, you would see a total 30 percent reduction in your Social Security income, which is $1,657 in 2022. At the age of 62, you’d earn $1,160 every month.
However, if you waited until you were 70 and received a 24 percent increase in benefits, your income would rise to $2,055.
A quick calculation indicates that’s an additional $895 every month — or $10,740 per year. So, if you wait an extra eight years, your income will skyrocket.
Of course, you must determine if you would want to get less money each year but receive it sooner or optimize your retirement income. However, for many seniors, waiting is the best option because a delayed claim provides significant additional funds.