Here’s How To Withdraw An Extra 24% From Social Security

Here’s How To Withdraw An Extra 24% From Social Security

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Almost all American workers are eligible for Social Security benefits, and people can start collecting their monthly checks anytime between age 62 and 70. The full retirement age is currently set at 67 for workers born in 1960 or later. and as the expression suggests, this is the age to claim yours complete Social Security benefits calculated based on your work history.

However, few people are willing to wait. Nearly 90% of eligible Americans apply for Social Security at or before full retirement age, and about a third of recipients at age 62 apply as early as possible. Only 6% of women and 4% of men waited until age 70 to start collecting their pension in 2018. However, if you are one of the few who can persevere and start claiming later, it could be a significant impact on your financial life after retirement.

Image source: Getty Images.

How much more can you get in the meantime?

If you decide to join Social Security before reaching full retirement age, your benefit will be permanently reduced. On the other hand, if you can wait longer than full retirement age – up to age 70 – your benefit will be adjusted upwards.

For employees who claim their benefits in advance:

  • Your pension will be permanently reduced by 6.67% per year (approximately 0.56% per month) if you are entitled to pension insurance up to 36 months before reaching full retirement age. For example, if your full retirement age is 67 and you start receiving your pension at age 65, you will receive a reduction of 13.3%.
  • After 36 months in advance, your allowance will be reduced by 20% More 5% per year (about 0.42% per month), until age 62. If you’re among the roughly one-third of Americans who start collecting benefits as soon as possible, your benefit will be permanently reduced by 30 percent from what it would be if you waited until full retirement age.

Conversely, if you wait until after full retirement age to start collecting, your benefit will permanently increase by 8% for each year of waiting (0.67% for each month) – up to until you reach the age of 70. So if your full retirement age is 67, that means you can get a 24% increase in your monthly Social Security benefit if you wait as long as possible.

What could the wait mean for your check?

Let’s say you were born in 1965 and the Social Security Administration (SSA) estimates that you will receive $2,000 per month from Social Security based on your work history if you wait until full retirement age to start collecting. (If you want an estimate based on your work record, you can view your Social Security statement at SSA.gov.)

Here’s how the decision to apply for Social Security at different ages would affect your first monthly checks:

When you start getting benefits when you’re old…

Your monthly benefit would be…

62

$1,400

65

$1,733

67

$2,000

68

$2,160

70

$2,480

Author’s calculations.

There are a few things to consider here. First, you would get nearly $500 more each month if you could wait another three years to start collecting benefits after reaching full retirement age. Second, the difference between applying for Social Security at age 62 and age 70 firmly. In fact, someone who waits until age 70 would receive 77% more than someone who gets a cash settlement at age 62. exactly the same results history. And finally, you don’t necessarily have to wait 70 years to see a significant difference. As you can see, even waiting a year or two can make a big difference in your income.

While waiting to claim Social Security, good idea for you?

Of course, $2,480 per month is better than $1,400 per month, all things being equal. But as with any financial decision, there’s a lot to consider, and waiting until age 70 isn’t the right decision for everyone. For example, maybe health issues are forcing you to retire earlier than expected and you need the income sooner. The main thing is that Whether You can waive Social Security, which can significantly increase your retirement income. However, there are several factors to consider when determining your ideal retirement age and this decision should not be taken lightly. This article might help you figure out when to start claiming benefits.

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