The average retired person receives approximately $1,500 in Social Security benefits per month. This can vary significantly depending on your lifetime earnings and, more critically, when you opt to begin receiving benefits for the first time. Find out if it’s a good time to refinance now, given the low mortgage rates.
Inflation has thrown a monkey in the works of Social Security benefits and the amount of money they provide for the ordinary person in the United States. Overall, prices have increased by a stunning 6 percent in the last year alone.
To put it into perspective, consider the following: Price increases in practically every major category have occurred in less than a year after inflation remained around zero for the larger part of the prior decade.
Particularly hard hit are older individuals living on fixed incomes, who are particularly hard hit by increases in grocery prices, which have increased by as much as 12 percent in some categories in recent years.
In order to mitigate this, the cost-of-living adjustment in 2022 will be 5.9 percent, which will be the biggest COLA in more than 40 years. Here are some tried-and-true techniques to help you gain a large increase in your income if you, like millions of other Americans, find themselves in a position of still requiring more.
You can learn more about Social Security 2022 — How the COLA Will Increase Benefits for the Average Senior Couple by visiting this page.
It all comes down to one thing: Delayed Retirement Credits.
One of the most essential considerations in determining your Social Security benefit is when you became eligible. The earliest you can apply for Social Security benefits is at the age of 62, and the latest is at the age of 70. In general, the earlier you claim benefits, the less you will receive; the longer you wait, up to age 70, the greater the amount of money you would receive.
Depending on your benefit level and the age at which you chose to begin receiving distributions, you might virtually double the amount of money you get each month in retirement benefits. This is because if you wait, you will be able to take advantage of delayed retirement credits.
According to the AARP, delayed retirement credits are a financial incentive provided by Social Security in exchange for delaying the receipt of your retirement income. Beginning in the month in which you reach your full retirement age, credits begin to accrue (which is 66 and 4 months for those born in 1956 and rises gradually to 67 for people born in 1960 and later.)
Social Security Eligibility – What It Takes to Receive the Maximum Monthly Benefit of $3,895
The Social Security Administration boosts your final payout by approximately two-thirds of 1 percent for each month you delay filing for benefits from the time you reach full retirement age until you reach the age of 70, for a total increase of 8 percent for each year you delay filing.
This means that seniors who reach full retirement age at 67 but do not file for benefits until they are 70 will have an additional 24 percent added to their monthly payout.
If you elect to receive benefits early, the credits will continue to accrue until you reach the age of 69, but the process will be partly reversed.
If a worker begins receiving benefits before reaching his or her normal or full retirement age, the Social Security Administration states that the person will get a decreased payout. It goes on to say that a worker can choose to retire as early as age 62, but that doing so may result in a reduction of as much as 30% in pay and benefits.
For further information, see What You Should Know About Social Security if You Plan to Retire Early.
According to the findings, nearly half of seniors expect to continue working after retirement — but there may be a better alternative.
If you retire at the age of 62 and receive an average benefit amount of $1,500, your monthly check could be lowered to $1,050 as a result. You will receive a check in the amount of $1,888 if you wait until you are 70 years old, assuming an average benefit and an 8 percent year-over-year accumulation commencing at full retirement age.
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