Increase $450 in Social Security checks – There’s 1 way retirees can get it and it’s not through COLA
According to Lagradaonline, While cost-of-living adjustments (COLAs) provide a yearly boost to Social Security benefits, the increase is often modest. Last year, the average benefit rose by $59 per month, and the COLA for 2025 is expected to be lower. However, there is another method to significantly increase your Social Security benefits, potentially adding up to $461 to your monthly check.
Understanding the Impact of Age on Social Security Benefits
Your Social Security benefit amount is influenced by the age at which you begin claiming. Full retirement age (FRA) for current workers is between 66 and 67. You can start claiming benefits as early as age 62, but doing so results in a reduced monthly payment. Specifically, for the first 36 months of early claiming, you lose 5/9 of 1% per month, and for each additional month, the reduction is 5/12 of 1%. This means that early claimants could see a reduction of 25% to 30% in their monthly benefits.
Conversely, delaying your Social Security benefits until age 70 can lead to an increase in your monthly payments. For each month you wait, your benefit grows by two-thirds of 1%. Although you will not receive payments during this delay period, the increase in your monthly benefit can be substantial.
Example of Benefit Increase
Consider a 67-year-old with an average monthly Social Security benefit of $1,919. By choosing to suspend benefits until age 70, they would see an increase of approximately $461 per month once they resume receiving payments. Although this means they would forgo around $69,000 in benefits from ages 67 to 70, the monthly benefit would increase to $2,380. Over 15 years, the total benefits received between ages 70 and 85 would amount to $428,400, compared to $414,504 if benefits had continued from ages 67 to 85. This strategy could be advantageous if you anticipate living beyond 85.
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Evaluating Whether to Suspend Benefits
Deciding to suspend Social Security benefits requires careful consideration of your financial situation and life expectancy. For many retirees, Social Security is a crucial source of income, with more than one-third of people aged 65 and older relying on it for at least half of their retirement income. Suspending benefits might not be feasible for those who depend on this income for daily expenses.
However, if you are still working and receiving Social Security benefits, suspending your benefits could be more manageable. Even if you do not delay for the full three years, pausing benefits for a year or a few months can still result in a higher monthly benefit once you resume. This decision can lead to a larger lifetime benefit, though it is essential to assess your financial readiness and future needs before making this choice.