Social Security benefits are usually around $1,500 per month for retirees. The amount can change according to your lifetime earnings, and most importantly, when you start collecting benefits.
Increasing inflation has reduced the benefits and coverage provided by Social Security for the average American. Just in the past 12 months, prices have gone up by 6% overall.
This is in stark contrast to the past decade when inflation was near zero and prices spiked in almost every major category in less than a year. Grocery prices have risen by as much as 12% in some categories.
Due to this, the cost-of-living adjustment next year will be 5.9% – the largest in over four decades. There are a few tried-and-true strategies you can employ to increase your income significantly if you are like millions of Americans. Those strategies include:
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Retire Comfortably through Delayed Retirement Credits
Social Security benefits are calculated based on the timing of your retirement. Social Security benefits can be claimed as early as age 62 and as late as age 70. If you begin to collect benefits early, the benefits will be less. And if you wait until you are 70, the benefits will be more.
You can almost double the benefits you receive each month depending on the amount of your benefit and when you decide to begin receiving them. Delaying your retirement can provide you with delayed retirement credits.
Social Security rewards you for delaying filing for retirement by giving you delayed retirement credits, according to AARP. After you reach full retirement age (66 and 4 months for 1956 births and progressively up to 67 for the 1960s and after,) you start accumulating credits.
Each month you delay filing for benefits from the age of full retirement until the age of 70, the Social Security Administration increases your benefits by about two-thirds of 1% – up to a maximum of eight percent per year. If a retiree reaches full retirement age at 67 but does not claim until he or she turns 70, there will be an automatic additional 24% added to their monthly benefit.
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Retirement is Made Easier
Credits accumulate up to age 69, although they may work in reverse if you commence your benefits early.
According to the SSA, “if a worker begins receiving benefits before his/her normal or full retirement age, the worker will receive a reduced benefit.”
The report also says that a worker can retire before age 62 if they wish, but it could result in a 30% reduction.
For an average benefit amount of $1,500, retiring at 62 will result in a reduction of your check to $1,050. The average benefit would be $1,888 at full retirement age if you wait until 70 and assume an 8% rate of accrual.