Here’s How to Get an Even Bigger Social Security Raise in 2024

It’s been a tough couple of years for Social Security recipients. Inflation has sent the cost of living sharply higher, and it’s taken time for increases in Social Security benefits to take effect. After a painful period in which the Consumer Price Index has risen by 7.1% over the past 12 months, those who rely on Social Security are only now seeing the annual cost-of-living adjustment (COLA) reflecting those price changes appear in their monthly benefit checks.

With 2023’s COLA set to boost Social Security payments by 8.7% starting in January, it’s understandable that many people are excited to get a little extra cash from the federal government. However, there’s a way that you could get an even bigger raise in your Social Security in 2024.

How to suspend your Social Security benefits

The Social Security Administration (SSA) gives retirement benefit recipients who have reached full retirement age (FRA) the ability to suspend their benefits. For those born in 1960 or later, full retirement age is 67, while those born between 1943 and 1954 have an FRA of 66, and those born between 1955 and 1959 add two months to the 66-year-old FRA for each year between 1954 and the year of their birth.

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Suspending your benefits means voluntarily giving up the Social Security checks you would have received during the time of the suspension. That might not seem smart, but the advantage of doing so is you can earn delayed retirement credits that will increase the size of future benefits once you start collecting them again.

You can communicate your decision to suspend benefit payments to the SSA in several different ways, including either orally or in writing. There’s no requirement for a signed request or any other formal documentation. If you know in advance when you will want to start receiving your benefits again, you can specify that date in your initial letter, or you can just let the SSA know when you want your benefits reinstated when the time comes.

Why suspending your benefits can boost your future raises

Delayed retirement credits boost the size of your benefits by 8% for every year that you suspend taking monthly checks. That’s on top of whatever increase you would get from annual COLAs.

As an example, say that your retirement benefit was $1,500 per month in 2022 and you decide to suspend your benefits for 12 months in 2023. Applying the 8.7% COLA, you’ll give up 12 checks that would’ve been $1,630.50 per month, for a total of $19,566 in benefits given up.

Say that the COLA for 2024 turns out to be 4%. In that case, if you hadn’t suspended your benefits, you’d receive about $1,696 each month in 2024. However, if you suspended your benefits for a year, then you’d get an extra 8% boost to $1,831 per month. That’s 12.3% higher than what your 2023 monthly benefit would have been — effectively giving you an even bigger 2024 raise than you would’ve gotten in 2023 if you hadn’t suspended your benefits.

Is the trade-off worth it?

Looking at the math, suspending your benefits gives you $135 more in monthly benefits, but it costs you $19,566 in missing checks for that 12-month period. Run the numbers, and you’ll see that it’ll take you a bit more than 12 years to catch up with those higher payments and offset the lost income in 2023 that results from the one-year suspension.

Keep in mind that suspending your benefits can also affect others. If you have family members relying on your work history for their spousal or children’s benefits, then those benefits would also potentially disappear temporarily if you use the suspension method.

However, using this strategy can also help your family in the future. If you pass away leaving a surviving spouse behind, the survivors benefits paid will be higher if you suspend your retirement benefits than if you hadn’t done so.

Whether that trade-off is worth it to you depends on many factors, including your financial situation and your health. For many, though, it’s worth considering to boost the size of those future Social Security checks.

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