HomeSocial SecuritySocial Security: How to Boost Your Benefits With the Delayed Retirement Credits?

Social Security: How to Boost Your Benefits With the Delayed Retirement Credits?

What time should a retiree apply for Social security benefits? If social security is filed earlier, then one can lose a certain amount of money, if it is filed late, one can gather interest on the social security payment.

One can start filling for social security from the age of 62. This is the official age, but not the full retirement age.

What is the Full Retirement Age?

Since people get social security till they die and people are living longer, Congress in 1983 decided to gradually raise the full retirement age also known as the normal retirement age from 65 to 67. The increase is gradual therefore there are different retirement ages.

For those born 1943 and 1954, the full retirement age is 66, the year 1955 is 66 and 2 months, the year 1956 is 66 and 4 months, the year 1957 is 66 and 6 months, the year 1958 is 66 and 8 months, the year 1959 is 66 and 10 months, finally for those who were born in 1960 their full retirement age is 67.

Once a person reached the age of 62. They are eligible to file for social security benefits. The only problem is that once you file before the full retirement age, you won’t get the full entitlement. For instance, for someone born in the year 1955, and the person started earning social security benefits at 62 they earn 74.2% instead of 100% and their spouse earns 34.6% instead of 50%.

Assuming this same person waits till age 65 before starting social security benefits, the person wants 92.2% instead of 100% and the spouse earns 45.1% instead of 50%. The person born in 1955 starts earning 100% and the spouse earns 50% once he/she reaches age 66 years and 2 months which is his/her full retirement age.

Note: The amount you receive when you first get social benefits sets the base for the amount you will receive for the rest of your life.

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Delayed Retirement Credits

Now, assuming this person born in 1955 did not file for social security at 62, did not file at the full retirement age of 66 years 2 months but waited till let’s say 70 years of age; the social security benefits of that person is increased by what is called Delayed retirement Credits. The benefits increase stops at age 70.

How Much Increase?

For those born by 1943 or later, every month, it increases by 2/3 of 1% and in a year it increases by 8%. The percentage of increase is based on Birthdays. 1933-1934(5.5%), 1935-1936(6.0%), 1937-1938(6.5%), 1939-1940(7.0%) , 1941-1942(7.5%), 1943 or later(8.0%).

If you wait till 70

Now, using someone born in 1960 as an example, assuming this person waited till age 70. Thie full retirement of 1960 is 67. From 67 to age 70 is 3 years. 8.0% multiplied by 3 years is 24%. This means that their normal 100% assuming they retire by 67 will be increased by 24% and that is how much such person gets Evey month for the rest of their lives except it is increased again by other government social services packages.

Sort out Medicare even if you decide to wait.

Medicare usually starts when a person reaches age 65. There is a late enrollment fee if it’s delayed. Part A and B of the Original Medicare application is 3 months before the age of 65. Even if you decide to delay your social security, please sign up for Medicare.

Some Factors to Consider before considering Delayed Retirement Credits.

You need to consider the following: Are you still working? What’s your life expectancy, Are you eligible for benefits on someone else’s record?, Do you have other income to support you if you decide to delay taking your benefits, will other family members qualify for benefits on your record?

A Benefit of early Social Security Application

Do you know that applying for social security benefits by age 62 or earlier than full retirement age might give you smaller pay but you will get it for a longer time than someone applying at 70? It all depends on life expectancy.

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