Unlock a 25% Boost in Your Social Security Check with This Simple Trick
President Joe Biden speaking after signing the foreign aid bill at the White House, April 24, 2024, in Washington. Photo: Jim Watson/AFP via Getty Images
Understanding Social Security Benefits
To all receiving Social Security benefits, there may be a way to boost your monthly payments by over 25%, even if you've already claimed them. The amount you receive is influenced by several factors, including the age at which you start collecting benefits. Claiming early, at age 62, results in smaller payments compared to waiting until your full retirement age or age 70. The difference can be as much as 77%. For those who have already claimed benefits, there's still a strategy to increase them significantly—potentially up to 28%.
Calculating Your Benefits
Understanding how the Social Security Administration (SSA) calculates benefits is key. They consider your total career earnings, your birth date, and the age you begin receiving benefits. The SSA adjusts your earnings for inflation, averages the top 35 years, and uses this to calculate your primary insurance amount (PIA). Your PIA is what you receive if you claim at full retirement age (FRA). Depending on your birth year, the FRA ranges from 66 to 67, with adjustments for those born after 1954. For example, waiting until age 70 can increase your benefits significantly. The increase ranges from 24% to 32% above your PIA, depending on your birth year.
Optimizing Your Benefits
For those who claimed early, suspending benefits once you reach FRA can help accumulate delayed retirement credits, increasing your monthly check by two-thirds of a percentage point for each month you delay. Benefits will resume automatically at age 70. However, suspending benefits has important considerations. If you suspend your benefits, no one else (except a divorced spouse) can collect on your record. Additionally, Medicare Part B premiums, which are typically deducted from Social Security payments, must be paid out of pocket during the suspension. This strategy could significantly enhance your monthly benefits, making a difference in retirement. It’s important to evaluate your financial situation and consult with a financial advisor before making decisions. Delaying benefits might be particularly beneficial if you anticipate higher medical costs in later years or want to maximize your income. Understanding the nuances of Social Security can help you make the most of your benefits.