Social Security benefits increase by more than 25% – Here’s how to get them in July

Chris Hemsworth
4 Min Read

If you’re receiving Social Security benefits or planning to, there’s a strategic way to potentially increase your monthly payout by up to 28%, even if you’ve already started claiming. Understanding when and how to claim your benefits can significantly impact your financial security in retirement. Here’s what you need to know:

Understanding Social Security Benefits

When it comes to Social Security, your monthly benefit is determined by factors like your earnings history, birth date, and the age at which you start receiving benefits. The earlier you claim, the lower your monthly payment will be. For instance, claiming at age 62 can reduce your benefits by as much as 25-30% compared to waiting until your full retirement age (FRA) or later.

How Delaying Benefits Increases Payouts

Delaying benefits past your FRA, which ranges from 66 to 67 depending on your birth year, can lead to substantial increases in your monthly checks. For every year you delay beyond your FRA, you accrue delayed retirement credits, boosting your benefit amount by about 8% annually up to age 70. This can result in a payment that’s significantly higher — up to 24-32% more than if you had claimed at your FRA.

Strategy to Increase Benefits

To maximize your benefits, consider suspending your Social Security benefits once you reach your FRA. By suspending, you stop receiving monthly payments temporarily but accumulate delayed retirement credits, enhancing your future benefit amount. This strategy can increase your monthly check by two-thirds of a percentage point for each month of suspension, totaling up to 8% per year.

Important Considerations

Before suspending benefits, weigh the pros and cons. While you’ll increase your future benefits, no one else receiving benefits on your record (except for divorced spouses) can receive payments during the suspension period. Also, Medicare Part B premiums must be paid out of pocket if your Social Security benefits are suspended, requiring careful financial planning.

FAQs About Maximizing Social Security Benefits

1. How can I increase my Social Security benefits after claiming?

By suspending benefits at FRA or later, you can accrue delayed retirement credits, boosting your monthly check.

2. What’s the impact of claiming early vs. delaying benefits?

Claiming early reduces your monthly benefit, while delaying past your FRA increases it, potentially by 24-32% by age 70.

3. Can my spouse receive benefits if I suspend mine?

Generally, no, except in the case of divorced spouses.

4. How do delayed retirement credits work?

They increase your benefit by approximately 8% per year beyond your FRA, up to age 70.

5. What should I consider before suspending my benefits?

Ensure you can cover Medicare Part B premiums and understand the implications for other beneficiaries on your record.

Understanding the nuances of Social Security benefits can lead to a more financially secure retirement. By strategically planning when to claim or suspend your benefits, you can potentially increase your monthly income significantly. Consider your options carefully and consult with a financial advisor to make the best decision for your retirement planning.

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