If you receive Social Security benefits, there might be a way to increase your monthly check by more than 25%, even if you have already claimed benefits. The amount you receive each month depends on several factors, many of which you can control.
Deciding when to collect your first monthly check has a significant impact on your benefit because the earlier you claim, the smaller your payment will be. There can be a 77% difference if you wait until you reach your full retirement age of 70 instead of claiming as soon as possible at age 62. If you want to learn how you can get a boost in Social Security benefits of up to 28%, read on.
Understanding How Social Security Benefits Are Calculated
Factors That Influence Your Benefit Amount
When you apply for Social Security retirement benefits, the amount you receive is influenced by three main factors:
- The total amount of what you have earned in your career.
- The date you were born.
- The age at which you start receiving benefits.
How the SSA Calculates Your Benefits
The government first reviews your earnings record when you apply for Social Security benefits. Then, the Social Security Administration (SSA) adjusts your earnings each year to account for the gradual rise in the standard of living. They average the adjusted earnings from the 35 years with the highest earnings to calculate your primary insurance amount (PIA).
If you apply at the age of 65, you will receive the PIA. The Full Retirement Age (FRA) has increased over time; it peaked at 67 for those born in 1960 or later. The table below shows the percentage of your PIA you receive based on your birth year and claiming age:
| Birth Year | Age 62 | Age 63 | Age 64 | Age 65 | Age 66 | Age 67 | Age 68 | Age 69 | Age 70 |
|---|---|---|---|---|---|---|---|---|---|
| 1943 to 1954 | 75% | 80% | 86.70% | 93.30% | 100% | 108% | 116% | 124% | 132% |
| 1955 | 74.20% | 79.20% | 85.60% | 92.20% | 98.90% | 106.70% | 114.70% | 122.70% | 130.70% |
| 1956 | 73.30% | 78.30% | 84.40% | 91.10% | 97.80% | 105.30% | 113.30% | 121.30% | 129.30% |
| 1957 | 72.50% | 77.50% | 83.30% | 90% | 96.70% | 104% | 112% | 120% | 128% |
| 1958 | 71.70% | 76.70% | 82.20% | 88.90% | 95.60% | 102.70% | 110.70% | 118.70% | 126.70% |
| 1959 | 70.80% | 75.80% | 81.10% | 87.80% | 94.40% | 101.30% | 109.30% | 117.30% | 125.30% |
| 1960 or later | 70% | 75% | 80% | 86.70% | 93.30% | 100% | 108% | 116% | 124% |
As you can see, waiting until age 70 can result in a monthly check that is 24% to 32% higher than your PIA. However, even if you claim early, you may still be able to increase your benefit check and receive delayed retirement credits.
How to Boost Your Social Security Benefits by Up to 28%
Delayed Retirement Credits
To obtain delayed retirement credits, you can suspend Social Security benefits once you reach your FRA. This means you will no longer receive monthly checks, but you will accumulate delayed retirement credits, which will increase your monthly benefit by two-thirds of a percentage point. If you do not resume your benefits, they will automatically restart when you reach the age of 70.
Important Considerations Before Suspending Benefits
There are a few important things to consider before suspending your Social Security benefits:
- No one on your record who is collecting benefits now (other than a divorced spouse) will be able to collect benefits in the future. Your spouse will switch back to their own benefit if they qualify after receiving spousal benefits.
- Medicare beneficiaries must pay Medicare Part B premiums out of pocket since the SSA deducts them from their Social Security checks. To afford the extra expense, you must set aside funds from your paychecks or savings.
Suspending Social Security benefits can increase monthly earnings by up to 28% for those born in 1957, 26.7% for those born in 1958, 25.3% for those born in 1959, and 24% for those born in 1960 or later.
However, it’s essential to consider the impact on any family members who might be receiving benefits based on your record and the need to cover Medicare premiums out of pocket. Making informed decisions about when to start and potentially suspend your benefits can lead to a more secure financial future during retirement.
Frequently Asked Questions
1. What is the Full Retirement Age (FRA)?
The Full Retirement Age (FRA) is the age at which you are eligible to receive your full Social Security benefits. It varies based on your birth year.
2. How can I calculate my Primary Insurance Amount (PIA)?
Your PIA is calculated based on your highest 35 years of earnings, adjusted for inflation.
3. Can I suspend my Social Security benefits after I start receiving them?
Yes, you can suspend your benefits once you reach your FRA to accumulate delayed retirement credits.
4. Will suspending my benefits affect my spouse’s benefits?
If your spouse is collecting benefits based on your record, they will have to switch to their own benefits if you suspend yours.
5. Do I have to pay Medicare premiums out of pocket if I suspend my benefits?
Yes, you must pay Medicare Part B premiums out of pocket if you suspend your Social Security benefits.
Understanding how Social Security benefits work and the strategies available can help you maximize your monthly checks. By delaying your benefits and considering suspending them after reaching your FRA, you can potentially increase your benefits by up to 28%.