Increase Your Retirement Income by $740 Per Month—Here’s How

Social Security helps millions of people in the United States to get by during retirement. It’s helped people for years, but it has many myths and misconceptions. In fact, a lot of people didn’t realize what the impact of starting Social Security on or just before the actual age at which you begin receiving benefits will have on your monthly payment.

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Now, it’s just a simple, but important fact: if you just take a bit of time and use a little common sense, you can pump up your monthly benefit by hundreds of dollars. For instance, in other cases, the difference in monthly benefits can be as much as $740.

Everyone does not get the same from Social Security. Various factors determine how much you will receive when you begin taking benefits, not least of all your age.

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Age and Payment Math

Taking Social Security benefits at age 62, the minimum, will mean you will get less money per month. That’s because if you begin taking benefits before your FRA, you will permanently reduce your payout. Your date of birth determines what FRA is between 66 and 67 years.

But if you wait until age 70, your payout goes way up. And it can be anywhere between 24% and 32%, and that all adds up to a very large difference in your monthly income.

A practical example

First, let’s dive into the numbers. As of 2023, a person who begins taking benefits at age 62 can expect to get about $1,298 per month. At age 70, however, the same person can qualify for up to $2,038 a month in payments. Not a small amount needs to be $740.

But not everyone is going to be able to wait that long. That is, however, if you wait even a year or two, it can amount to a great difference in your ultimate retirement benefit.

Is Delaying Always Right?

Delaying benefits can be good for some, but not others. That’s entirely a matter of your situation.

There is a very good chance, if your savings or your body are healthy, you can wait for the maximum payout. Getting that early money is a logical decision if you need it or would like to enjoy your active retirement years.

A 2022 study from the National Bureau of Economic Research found that nearly all seniors (99.4%) could substantially bump up their total income by holding off on benefits. Clearly, however, the importance of individual goals and circumstances is not taken into account in this analysis.

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You’ll be surprised to learn that there are also other ways to get more out of Social Security. Let’s take an example: with correct planning and understanding of the system, you could bring in up to $22,924 annually.

Things to consider when making a decision

The decision of when to start taking Social Security benefits is complex, and there is no universal solution. It is important to understand what options are available to you and which one will work best for your circumstances.

Delaying benefits may be one way to increase your payments, but sometimes starting early is the decision that allows you to enjoy your retirement to the fullest.

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Conclusion:

Social Security decisions need to be made wisely. It not only affects your financial stability but can also improve the years of your life in which you want to enjoy the fruits of your hard work. The better your planning, the more enjoyable your retirement will be.