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Are you unsure about when to start claiming your Social Security benefits? Many retirees rush to collect payments as soon as they turn 62, but did you know that waiting can significantly boost your monthly payout? According to recent research, fewer than 1% of retirees maximize their lifetime income by claiming Social Security before age 66. So, when is the best time to start? Let’s break it down.
Unlock Your Retirement Potential: Maximize Social Security Benefits with This Simple Strategy!
How Your Claiming Age Impacts Your Benefits!
Your lifetime earnings and the timing of your claim are the two primary determinants of your Social Security payments. The government first uses the inflation-adjusted wages from your highest-paid 35 years of work to determine your main insurance amount (PIA). Depending on your birth year, this sum is what you would get if you filed a claim at full retirement age (FRA).
But here’s the kicker: if you claim before FRA, your benefits will be reduced, while delaying past FRA can increase them. For example, if you were born in 1960 or later, claiming at 62 would give you 70% of your PIA, while waiting until 70 could boost it to 124%. That’s a significant difference in your monthly paycheck!
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The Power of Delaying Social Security Benefits!
Let’s put it into perspective with a simple example. Say your PIA is $1,000 per month. Claiming at 62 would give you $700, but waiting until 70 could bump it up to $1,240. That’s an extra $540 every month, or $6,480 per year! And the best part? This strategy works for everyone, regardless of their specific PIA.
Why, therefore, do so many people file early claims? Granted, each person’s circumstances are unique, and some could require the funds immediately. However, if you can wait, it can end up being quite beneficial in the long term. You can make a more intelligent choice that positions you for a more pleasant retirement by being aware of how your claiming age affects your benefits. Consider delaying your Social Security benefits and profit later on instead of throwing money away!
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