Taking This Action Could Increase Your Social Security Benefits by $70,000 Over Your Lifetime.
The trick is so simple that anyone can master it.
Most people’s attention is drawn to the amount of money they receive each month from Social Security, but that’s just part of the tale. For the greatest money, you need to optimize your lifetime benefits, which involves considering how long you’ll make these payments during the course of your retirement.
Here’s a simple way to boost your Social Security payment by nearly $70,000 throughout the course of your lifetime.
Social Security benefits are calculated in a specific way by the government.
In order to comprehend your Social Security payment, you must first understand how it is calculated by the government. To put it another way, it maintains track of how much money you’ve earned over the course of your working career and how much Social Security taxes you’ve paid on it.
For Social Security purposes, your 35 highest-earning years, adjusted for inflation, are totaled up when you apply. To determine your primary insurance amount, run this through a formula that is dependent on your date of birth (PIA).
However, if you want to get this monthly benefit, you must wait until you reach your full retirement age to enroll (FRA). For today’s workers, that number ranges from 66 to 67.
It is best to sign up before this happens to reduce your payments. If you sign up right away at 62 and your FRA is 67, you’ll only get 70% of your PIA per check. Those who have an FRA of 66 can sign up at 62 and receive 75% of their PIA per check.
Your monthly benefit checks will increase by a small amount each month until you reach your maximum benefit at 70 years old, at which point they will stop increasing. Amounts to 124% or 122% of one’s PIA per month, depending on one’s FRA.
We can now discuss ways to optimize your lifetime Social Security payout now that we know that.
How to increase your lifetime Social Security income by more than $70,000
Currently, the average monthly Social Security benefit is $1,661. Starting at age 62, if you lived to the age of 85, you’d receive $458,436 from the program. But remember that starting early reduces the size of your checks.
If you had waited until you reached the maximum benefit age of 70, assuming an FRA of 67, you would have received $2,943 per month in Social Security benefits. A lifetime benefit of $529,740 if you survive to 85 while receiving fewer payments is still possible.
Those benefits would have cost you an additional $71,304 had you signed up for them at the age of 62.
However, this all depends on a long life span. The sooner you enroll in Social Security, the more money you will receive if you live past 75. Delaying benefits is not always the best option, so don’t make that assumption.
Choosing when to join the Social Security system
If you want to get the most bang for your buck, consider how long you plan to live. If you don’t have a compelling reason to believe you won’t live through your early or mid-80s, you should presume you will. If you’re making a decision based on the health history of your family, it’s a good idea to factor in the current state of your health as well.
Create my Social Security account as soon as you know how long you expect to live. You can use this tool to estimate your Social Security benefits at various ages based on your prior employment experience. This can be used to estimate the long-term financial gain you’ll receive from your investment.
Your yearly benefit can be calculated in the same way as your monthly benefit — in this case, $1,661 per month at the age of 62 — by multiplying it by 12. That works out to $19,932 each year for us. You can then divide that total by the number of years you expect to be eligible for payments.
In our example, we estimated an average life expectancy of 85 years, resulting in a total of 23 years of coverage under our hypothetical scenario. So $458,436 is the lifetime value of $19,932 multiplied by 23 years.
Attempt this with a variety of ages until you find the most lucrative one. Delay benefits until this age if as much as possible.
If your income — and hence your Social Security payment — changes over time, you may have to repeat this process. Your goals and your retirement timetable may also alter. You won’t have to spend a lot of time doing this, and it will help you ensure that you don’t miss out on an easy way to increase your Social Security payment.
The $18,984 in extra Social Security income that the majority of retirees fail to take advantage of
When it comes to investing in your retirement, most Americans are a few years (or more) behind the curve. A handful of “Social Security secrets” can assist secure a higher retirement income.
For instance, a simple trick might pay you an additional $18,984 per year! We believe that once you learn how to optimize your Social Security benefits, you will be able to retire with the peace of mind that we all desire. To understand more about these methods, simply go to this page.
