If you want to get bigger Social Security checks when you retire, it’s important to know all about the federal government’s program. Unfortunately, it can be difficult to get the information you need, and many people are still unaware of the key aspects of Social Security that determine the amount of your benefits. Below, you’ll learn about four essential parts of Social Security that aren’t as well-known as you might think.
1. Earning more increases your benefits – but the amount of the increase depends on how much you earn
Your best 35 years of earnings history goes into determining your monthly benefit, so increasing your average earnings will increase the size of your Social Security checks. However, people with lower incomes over the course of their career benefit more from each dollar of additional income than people with higher incomes.
People also read…
Specifically, the formula that determines the benefit amount adds $0.90 to your standard retirement benefit for every dollar of average monthly career income up to a certain amount, or $1,115 for those turning 62 in 2023. .
Once your average monthly earnings exceed this threshold, each additional dollar earns only $0.32 in additional benefits, up to $6,721. Beyond that, you’ll only get $0.15 in additional benefits for a $1 increase in average monthly earnings.
2. Retiring later can give your benefits a double boost
Choosing to delay retirement for an additional year can help increase your Social Security benefits in two ways. Many people have their best earning years late in their careers, so an extra year of work will often be a top 35 year that increases average monthly earnings. Also, if you can delay applying for Social Security an additional year because you’re working longer, your checks will typically be 6% to 8% higher than they would be if you had applied sooner.
3. There is no double benefit for spouses
Many people know that married couples have access to two different types of benefits. Those with their own employment history can apply for retirement benefits based on their own income, but they can also apply for spousal benefits based on their spouse’s employment history.
However, you cannot take these two benefits and simply add them together. Instead, the Social Security Administration applies your retirement benefit first. If your spousal benefit is greater, SSA increases your payment to the higher spousal benefit amount. If the retirement benefit were higher, you would essentially get no additional benefit from being entitled to a spousal benefit.
4. Age 62 is not the first date for Social Security benefits if you are a surviving spouse
Most regular retirement and spousal benefits are first available at age 62. However, if you are married and your spouse dies, you may be eligible for survivor benefits, which are available earlier.
Specifically, most surviving spouses can apply for their survivor benefits starting at age 60. Those who are disabled can do so from the age of 50. As with other types of benefits, those who apply early will have to accept reductions in the amount of their payments, but the extra money can still be valuable.
One thing to also note is that remarriage can end survivor benefits. However, if you wait until age 60 or more before remarrying, you can still claim survivor benefits on your deceased ex-spouse’s work history.
Get the benefits you deserve
Social Security can be complicated to understand. Fortunately, however, some basic concepts are quite easy to understand, as long as you know them. Make sure you get every Social Security penny you’re entitled to.
The $18,984 Social Security premium that most retirees completely overlook
If you’re like most Americans, you’re a few years (or more) behind on your retirement savings. But a handful of little-known “Social Security secrets” could help boost your retirement income. For example: an easy trick could earn you up to $18,984 more…every year! Once you learn how to maximize your Social Security benefits, we believe you can retire confidently with the peace of mind we all seek. Just click here to find out how to learn more about these strategies.
The Motley Fool has a disclosure policy.
#Social #Security #Secrets