What options do you have when it comes to receiving Social Security benefits?
Full retirement age, also known as FRA, entitles you to the full amount of your monthly pension depending on your unique pay history. Depending on the year you were born, your FRA can be either 66, 67, or somewhere in the middle of the range.
Meanwhile, you’ll be able to enroll in a reduced benefit program starting at the age of 62. You can also postpone your Social Security application beyond the first of the month. Your benefit will increase by 8% per year you work, on an ongoing basis, for every year you work.
Once you reach the age of 70, there will be no financial benefit to delaying Social Security, so it’s best to enroll in benefits at that point rather than later. However, if you do, you might end up with a monthly benefit that is 24 percent to 32 percent larger than what you would have received if you had joined up with the Federal Reserve.
What options do you have when it comes to receiving Social Security benefits?
Full retirement age, also known as FRA, entitles you to the full amount of your monthly pension depending on your unique pay history. Depending on the year you were born, your FRA can be either 66, 67, or somewhere in the middle of the range.
Meanwhile, you’ll be able to enroll in a reduced benefit program starting at the age of 62. You can also postpone your Social Security application beyond the first of the month. Your benefit will increase by 8% per year you work, on an ongoing basis, for every year you work.
Once you reach the age of 70, there will be no financial benefit to delaying Social Security, so it’s best to enroll in benefits at that point rather than later. However, if you do, you might end up with a monthly benefit that is 24 percent to 32 percent larger than what you would have received if you had joined up with the Federal Reserve.
The average senior today receives approximately $20,000 in Social Security benefits per year. This isn’t a substantial sum of money on its own. But when combined with withdrawals from a retirement plan, the $20,000 might provide a comfortable source of retirement revenue.
In contrast, if you don’t have much money saved up, waiting for your Social Security application until you are 70 makes perfect sense.
It is true that many seniors derive the vast majority of their retirement income from their IRA or 401(k) plan, rather than from Social Security. However, if you were not able to amass the retirement savings you had hoped for, increasing your monthly benefits by a significant amount is an excellent method to help make up for the lost time.
Consider the following scenario: you are eligible for an average monthly payout of $1,657 at an FRA of 67. If you wait until you are 70 years old to file, you will be guaranteed a monthly payout of $2,055 each month instead.
That amounts to about $400 in more money per month or approximately $4,800 in additional income per year. In addition, I can surely assist you in making up for the fact that your retirement account isn’t generating the money you intended.
Waiting can be beneficial in some situations.
Many seniors may not want to wait until they are 70 years old before claiming Social Security benefits. And other people aren’t even given the option to do so.
If you are pushed out of work at a younger age owing to health concerns or layoffs, you may not be able to wait to file for unemployment benefits until later in life. However, if you have the choice to postpone retirement until your 70th birthday, it is wise to do so if you did not manage to save a substantial sum of money for your golden years.
The difference between struggling financially as a senior and functioning properly in that scenario could be the result of postponing your filing. As a result, it is worthwhile to be patient in order to prevent a world of financial hardship.
