When you start getting Social Security payments, the amount you get each month might not stay the same. The size of your check can change over time depending on a number of things. Knowing these can help you get the most out of your benefits.
Picking the age at which you start getting Social Security retirement payments is one of the most important choices you’ll have to make. This choice has a big effect on how much money you will have in retirement.
If you start getting Social Security benefits before you hit full retirement age, your monthly payment will be less. On the other hand, delaying your benefits until after you hit full retirement age can make a big difference in how much you get.
When it comes to benefits, the difference between starting to get them at age 62 and waiting until age 70 can be a big 77% increase in your monthly payments.
However, if you are already getting Social Security, you should know that there is still a way to possibly get your monthly check to be bigger. If you follow a certain plan, you could get up to 26.7% more in Social Security payments.
Key Factors Influencing Social Security Benefits
Before looking into ways to get your benefits raised, it’s important to know the basic things that affect how much you get each month from Social Security. The Social Security Administration (SSA) figures out your income by looking at three main factors:
- Lifetime Earnings: The amount you earned during your working years plays a pivotal role in determining your Social Security benefit. The SSA reviews your earnings history, adjusting for wage inflation over time. It identifies your 35 highest-earning years, averages the earnings from those years, and then divides the sum by 12 to calculate your average indexed monthly earnings (AIME).
- Year of Birth: The year you were born influences your full retirement age (FRA), which is the age at which you can claim full Social Security benefits. For individuals born in 1954 or earlier, the FRA is 66. For those born after 1954, the FRA gradually increases by two months each year until it reaches 67 for those born in 1960 or later.
- Age at Claiming: The age at which you decide to claim Social Security benefits directly affects the size of your monthly check. If you claim benefits before reaching your FRA, you will receive a reduced amount. On the other hand, delaying benefits beyond your FRA earns you delayed retirement credits, which increase your monthly benefit by two-thirds of a percent for each month you delay, up until age 70.
For example, if you wait to start getting Social Security until you turn 70, your monthly payment could go up by 24% to 32%, based on the year you were born. There is still a chance to earn these important delayed retirement credits, even if you have already taken out your benefits early.
The Strategy to Increase Your Social Security Benefit
Asking the SSA to suspend your payments is a good way to possibly get more money from Social Security.
This less well-known choice lets you briefly stop getting your monthly payments while still getting credits for delaying retirement every month you do so. When your benefits start up again, these points are applied, giving you a bigger monthly check.
After you hit your FRA, you can stop getting benefits at any time. As soon as the SSA agrees to your request, the ban starts the following month. If you don’t start getting benefits again before you turn 70, they will start again on their own.
Important Considerations
There are a few important things you should think about before you decide to stop getting assistance. First, if someone else, like a partner, is getting benefits based on your earnings record, those benefits will change. This means that they won’t be able to get benefits during the suspension time, unless they are a spouse who has been divorced.
Also, if you have Medicare, you will need to pay your Part B premiums out of pocket during the delay. Usually, these premiums are taken out of your Social Security payments. If you decide to temporarily stop getting benefits, you should plan to pay for these costs.