Here’s How to Score an Extra $1,830 per Social Security Check

While Social Security probably won’t cover all your expenses in retirement, there’s no denying larger checks can make your life easier. You actually have a lot of control over the size of your benefit, even if you’re not of claiming age yet. Anything you do to boost your income today can help increase the amount of your Social Security checks in the future.

But that’s not the only way to squeeze more money out of the program. There’s another, simple step you can take that could add up to $1,830 to your monthly Social Security checks.

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A quick primer on how your Social Security benefit is calculated

The government bases your Social Security benefit on your average indexed monthly earnings (AIME). This is your average monthly income over your 35 highest-earning years, adjusted for inflation.

The government takes your AIME and plugs it in for the benefit formula for your birth year. For those turning 62 in 2022, the formula is as follows:

Multiply the first $1,024 of your AIME by 90%.
Multiply any amount over $1,024 up to $6,172 by 32%.
Multiply any amount over $6,172 by 15%.
Total your results from Steps 1 to 3 and round down to the nearest dollar.

In the formula above, $1,024 and $6,172 are known as the bend points. These change every year, but the rest of the benefit calculation stays the same.

Your results from this formula tell you how much you can expect from Social Security if you claim at your full retirement age (FRA). That’s somewhere between 66 and 67, depending on your birth year. But not everyone claims then.

If you choose to sign up before or after your FRA, the government runs your benefit amount from the formula above through another formula that determines how much you’ll gain or lose from each check.

Starting early shrinks your benefit by 5/9 of 1% per month up to 36 months. If you sign up more than 36 months before your FRA, you’ll lose an additional 5/12 of 1% per month. That means if you apply for Social Security right away at 62, you only get 70% of your full benefit per check if your FRA is 67 or 75% if your FRA is 66.

If you delay benefits past your FRA, your checks will grow by 2/3 of 1% per month or about 8% per year. This continues until you reach 70 when you qualify for your maximum benefit. That’s 124% of your full benefit per check if your FRA is 67 or 132% if your FRA is 66.

How to add an extra $1,830 to your Social Security check

The largest Social Security benefit available in 2022 is $4,194 per month. In order to achieve this, you must have earned at least a predefined amount each year for at least 35 years. The amount for 2022 is $147,000, with the amount having risen in line with wage inflation from past years. It’s a tall order to amass that kind of earnings history, but the lucky few who manage it and delay benefits until 70 can reap the largest possible checks from the program.

But patience is key. Someone with the same income who signs up at 62 would only get $2,364 per check. It’s still a nice chunk of change, but it’s considerably less than the maximum — $1,830 less to be exact.

Now, for the average person, delaying benefits isn’t going to net them quite that much cash. If you qualify for the average $1,661 benefit at 62, delaying until 70 would boost your benefit to about $2,943 per month if your FRA was 67. That’s a difference of about $1,282. But that’s still a good amount of money, enough to make a noticeable difference in most people’s retirements.

It’s not the right strategy for everyone

Delaying Social Security benefits absolutely makes sense if you can afford to do so and you expect to live into your 80s or beyond. But if you have a terminal illness or a poor family health history, you might consider signing up earlier. Your checks will be smaller if you do this, but the extra years you’ll claim benefits may help you get more out of the program than you would by delaying.

You may also have to sign up for benefits early if you cannot afford to cover your retirement expenses without them. In this case, you may want to consider putting off Social Security for a few months or a year in order to reap some of the benefits of delaying without putting too much of a strain on your finances. Or you could try delaying retirement altogether.

You have to decide on the best strategy for you, but it’s important to explore all your options before you make that call. Figure out which strategy makes the most sense for you right now and review this annually when you update your retirement plan.

The $18,984 Social Security bonus most retirees completely overlook
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