There’s no doubt that making plans for retirement is hard. It can be challenging to manage without any additional income beyond Social Security and savings, which could deplete at any moment due to various circumstances.
This is particularly true for individuals who have dedicated their entire lives to climbing the corporate ladder, even without receiving a salary.
Some things can help your retirement go smoothly. For example, make sure you have a lot of savings, downsize your life (especially your home if you live in a high-cost area), budget carefully, get preventative medical care, and so on.
However, a little-known tip is that you may receive more money from Social Security than you anticipate.
The workings of Social Security
We all know how to receive our benefits when we stop working: simply wait until we reach our full retirement age (FRA), which for individuals born after 1960 is 67, and then submit our claim.
This, of course, assumes a number of conditions, including that a person has worked for at least 35 years, has no “zeroes” in the average used to calculate their income, or has had a taxable income for at least ten years.
But not everyone meets these requirements. Some individuals receive benefits based on their spouse’s employment history, while others have worked but experienced temporary unemployment and are unable to return due to external circumstances.
Additionally, the majority of individuals have not paid the full amount of payroll taxes, resulting in their benefits being less than what they would require for a comfortable retirement.
In 2024, the highest monthly Social Security benefit at FRA was $3,822. The average person who gets Social Security will get $1,976 a month this year.
The difference between the two shows that many retirees aren’t making nearly enough to support themselves and their lifestyle, and at some point, cutting back on expenses just won’t help.
Nobody can get more money when they retire than if they wait to start getting benefits until they are 70 years old. Every month after the first month you don’t claim Social Security, you will receive an additional 2/3 of 1% increase in your monthly benefit.
This will continue until you reach the maximum benefit at age 70. After age 70, you can no longer build up your benefits. Instead, they will start coming in right away.
Postponing a claim gives wealthy people one last chance to get more benefits. If they work, they won’t have to worry about bills. If FRA is 66 and 10 months, filing at 70 could increase a person’s monthly benefit by 25.33 percent.
If they wait until they are 70 years old and receive a monthly benefit of $4,018 this year, they can also receive an extra $5,036 a month from Social Security.
Of course, this will be easier for people who already make a lot of money because they can put off retirement even if they stop working, and most likely they will have enough savings or a job that doesn’t require as much stress, like part-time consulting or gig work.
This will enable them to postpone retirement longer than regular workers, who may be burdened with bills and insufficient savings.
So, if you’re thinking about getting benefits, wait as long as you can. Even waiting one or two years will help your benefits over time.
Read Also :- $3,089 Social Security payment unveiled for senior couples who are both on benefits