Are you trying to decide when to start drawing on your Social Security benefits? Knowing what your options are before you make an irreversible decision can really pay off.
It may be surprising to see the number of ways that you can increase your benefits, regardless of whether you take them early, on time, or late. There are several strategies that can provide you with a higher benefit, both now and later, if you play your cards right.
Read on to find out how you can get the most out of your benefits once you are ready to do something with them.
What sort of increase in Social Security benefits will benefits recipients see for 2022? The official word is out, and there will be a record-breaking 5.9% cost of living adjustment (COLA) to benefits for next year, according to the Social Security Administration.
In 2021, Social Security had a 1.3% COLA to benefits, which was slightly smaller than the 1.6% increase of 2020.
But in 2022, Social Security recipients will get a boost in benefit payments that is over four times the average COLA from these past two years. This coming COLA of 5.9% is also the largest increase in almost 40 years.
This has been done in an effort to keep up with the runaway inflation that has gripped America. The consumer price index shows that the price of retail goods has risen by an astounding 5.4% in 2021, at the time of this writing.
The pandemic has also disrupted much of the United States’ economic infrastructure and caused job losses. Retirees who depended on part-time work and other income sources were hit, so the COLA adjustment will help offset the decline in their incomes.
Starting on January 1, 2021, Social Security beneficiaries will see a boost in their benefits. Over 70 million recipients of Social Security and Supplemental Security income will receive a COLA bump of 1.3% in their monthly payouts.
This increase is lower than the increase of 1.6% for 2020 by 0.3%. It’s also 0.1% lower than the average COLA of 1.4% that recipients have received over the last decade.
The average Social Security recipient will see a monthly bump-up of about $20 overall. In other words, that will be an increase from an average benefit of $1,523 in 2020 to $1,543 in 2021. Read More
Editor’s note: The following post has been contributed by Andy Masaki. Andy is a blogger and financial writer associated with the Oak View Law Group. He is a debt expert and a member of several online forums, where he shares his advice as well as tips to lead a financially independent life.
Everyone wants a comfortable retirement to relax during their golden years. But a recent report by Barron’s revealed that most of the retirees are stressed about their income in retirement.
In our country, Social Security payments are one of the major sources of income for most retirees. In 2020, you can receive up to $3,790 per month as your Social Security benefits. But the fact is, many people don’t receive that much. According to the Social Security Administration, the average check is around $1,390.12.
So, what can you do to maximize your Social Security payments?
Here are some of the best possible tips to increase your Social Security benefits so that you can relax during your golden years. Let’s start. Read More
For the past few decades, people have been living longer than what Social Security was designed to pay out for. Millions of new retirees are joining the ranks of Social Security benefits recipients, now and in the coming decades.
In time, the outflowing payments to Social Security beneficiaries will start exceeding what Social Security has in reserves. The Social Security Administration will then have a decision to make.
It will have to rely more on the inflows from payroll taxes (and possibly other funding measures) in order to keep up its promised benefits payments to future generations of retirees.
Before the pandemic crisis, Social Security was looking at its reserves being depleted by roughly 2035. But now, over 20 million people have lost their jobs as a result of the spread of the coronavirus.
That is 10% of the U.S. workforce. Payroll taxes that would be pouring into the U.S. Treasury from everyone’s paychecks have lessened considerably. As a result, Social Security has been dipping further into its reserve funds in order to keep up its promises to retirees and other benefits recipients. Read More
As you gear up for crucial retirement decisions such as Social Security, you may have heard of “full retirement age.” The Social Security Administration refers to full retirement age as “normal” retirement age. This is the age at which you will receive 100% of your monthly retirement benefit.
But full retirement age isn’t the same for everyone. For those born before 1943, this is age 65. For those born after that year, full retirement age can range from 66 to 67 years old.
This matters for eligible recipients because choosing when they begin receiving benefits is one of the most important retirement decisions that they might make. Making the right choice can make a difference of tens, or even hundreds of thousands of dollars, in the lifetime benefits they are paid.
You can start taking Social Security benefits once you turn 62, but your benefit will be permanently reduced by 30% or more. You will have to wait until you reach your full retirement age to get your full benefit.
And if you delay collecting benefits until after your full retirement age? Then you can increase the amount you receive by about 8% per year until age 70. Waiting to take your benefits at 70 will increase your monthly benefit about one-third more than your regular full benefit. Read More
On October 10, the Social Security Administration officially released the amount of their cost-of-living adjustment for 2020. Almost 70 million Americans will see their Social Security benefits rise by 1.6% next year.
While this raise is less than the 2.8% cost-of-living-adjustment for 2019, it’s still higher than the 1.4% average COLA that participants have received over the past decade. The Senior Citizens League was also spot on with its projection for Social Security next year. Read More
While the exact details are still under wraps, Social Security recipients will be pleased to know that their benefits will be receiving a boost in 2020.
Every October, the Social Security Administration releases information regarding Cost-of-Living Adjustments to benefits. This year is no exception. On October 10th, the SSA will be releasing official details regarding the Cost-of-Living Adjustment that applies to 2020 Social Security payouts.
Expect a Social Security Benefits Boost of 1.6%
According to The Senior Citizen League, a nonpartisan group focused on senior issues, Social Security recipients will likely receive a 1.6% boost to their payouts, starting in 2020.
The league tracks data relating to how the SSA calculates its Cost-of-Living Adjustments. It bases their estimate on quarterly movements in the consumer price index for urban wage earners and clerical workers (CPI-W).
Mary Johnson, TSCL’s Social Security policy analyst, mentions that this increase will be smaller than prior raises. She said that it “would raise an average retiree benefit by about $23.40 per month, a big drop from the $40.90 that people with that level of benefits received this year.” Read More
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Millions of retirees depend on Social Security benefits as a major income source. For many people, it’s their primary income stream.
According to data from the Social Security Administration, and analysis by the Center on Budget and Policy Priorities, nearly two-thirds of elderly benefits recipients count on Social Security as their major cash income source.
But some news headlines in recent years have stirred public concerns about the program’s future. Dour, and even alarmist, news coverage of reports by the program trustees led many onlookers to wonder about the program’s solvency.
To help cut through lingering confusion, two economists participated in a public debate, hosted by the Soho Forum. Set up as an Oxford-style debate, the discussion tackled this resolution: “Given Social Security’s nearly $3 trillion trust fund, the system cannot add to the federal deficit.” Read More
Sure, you can start your Social Security benefits at age 62. But is it better to claim early or delay benefits until a later date?
While a one-size-fits-all answer doesn’t work for everybody, a new study suggests that ill-timed Social Security strategies are costing Americans dearly.
United Income found that retirees might lose $3.4 trillion in potential income due to timing of when they enroll for their benefits. The research was a joint effort between the fintech company and former top policy officials from the Social Security Administration.
What about the income effect on retirees at a personal level? On average, each retired household would miss out on $111,000 of lifetime benefits. And for current retirees, premature decisions could add up to collective losses of roughly $2.7 trillion.
That would average out to roughly $67,000 in lost income per household. Read More