The average Social Security benefit as of April 2024 was about $1,915 per month. That works out to $22,980 per year. While that’s enough to cover a significant portion of most seniors’ living expenses, it can be hard to live alone.
Luckily, you don’t have to settle for the average benefit if you understand how the government calculates your benefits. There’s one trick you can use to increase your average benefit by 24% over three years, but it’s not for everyone.
A quick summary of how the government calculates Social Security benefits
Understanding the government’s calculations Social Security Benefits Determining your PIA (Provisional Insurance Sum) is essential to maximizing your benefits. The government calculates it by taking your inflation-adjusted average monthly income over your highest earning 35 years. Social Security Benefit Calculation Formula .
PIA is the amount you are entitled to receive. Full Retirement Age (FRA) For today’s workers, that’s between age 66 and 67. But many people choose not to claim at that point, in which case the government runs an additional calculation that increases or decreases your benefit amount depending on your claiming age and FRA.
If you file under FRA, 5/9ths of 1% will be deducted for each month you file up to 36 months early — so 6.67% for a year early filing — and anyone filing under FRA for more than 36 months will have an additional 5/12ths of 1% deducted from their check each month (5% per year).
How to Add an Extra 24% to Your Social Security Benefits
You can also boost your check by delaying Social Security beyond your FRA. If you delay your benefits until you’re eligible for the largest check at age 70, you’ll earn 2/3 of 1% interest each month, or 8% annually. For workers with an FRA of 67, this can increase your benefits by up to 24%. If you qualify for the average monthly benefit of $1,915 at your FRA of 67, you’ll get an extra $460 in your check.
But this comes with a trade-off: To get the highest possible check, you’ll have to give up benefits in your 60s, which isn’t feasible for everyone. If you’ve struggled to save for retirement throughout your career and can’t work now, you may have no choice but to file for Social Security early to cover the costs.
Even if you can afford to delay taking your benefits, it’s not always wise. This strategy may lead to higher monthly benefits, but it could reduce your lifetime Social Security benefits if you don’t live past age 70. People who think they have a short life expectancy often stand to benefit the most overall by claiming Social Security for as long as possible.
When you want to postpone but can’t
Postponing Social Security until age 70 isn’t realistic for many workers, but that’s okay. You can use the knowledge above to boost your check a little. We’ve discussed how claiming based on your FRA can reduce your check. In other words, delaying claiming Social Security can increase your benefits at any age.
Filing at age 63 allows you to receive more per month than if you filed at age 62. Filing just one month later could add $8 to $13 to your average monthly Social Security benefit. For those looking to boost their benefits, delaying your original filing date for a little longer may be a more realistic option than waiting until age 70. Consider your life expectancy and how long you can afford to delay filing to help guide your decision. When to start social security .
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