The social security tip most people could use to increase their benefits after their claim – the crazy Motley

The importance of social security is undoubtedly incomparable among all social programs. Data from the Social Security Administration (SSA) show that more than 3 out of 5 elderly beneficiaries depend on their monthly checks to account for at least half of their monthly income, with 34% for almost all of the security (90%). 100%) of their income. Without this guaranteed payment, it is very likely that millions of seniors would struggle to make ends meet during their retirement.

Since older people depend on social security, there may be no decision to make. After all, your claim decision will have a profound impact on what you will receive in benefits each month.

A reminder on how your social security benefit is determined

Although there are seven factors that could affect your net social security payoff, there are four key factors:

1. Your History
2. Your income history [19659008] Your year of birth
3. Your claim age

As you can see, you have control over three of these four factors, putting the ball in your court for know how much you will receive from Social Security. ] The first two factors are somewhat intertwined. When calculating your full retirement benefit, the SSA will take into account your 35 highest paid and inflation-indexed years. So, to have a chance to maximize what you will receive from Social Security every month, you will have to work a minimum of 35 years – every year less than 35 results in an average of $ 0 – and you'll want to earn as much as you can in the years you work. Since you often gain experience and job skills as you get older, working in your 50s and 60s can be particularly helpful in increasing your average income by 35 years, increasing your monthly retirement benefit.

Your birth year you can not control, but it will dictate your full retirement age, or the age at which the SSA considers you eligible to receive your complete service. If you start receiving benefits before you reach the retirement age, you will accept a permanent reduction in your monthly payments. If, on the other hand, you are waiting after the retirement age before applying for benefits, you could benefit from an increase in your retirement pension. For baby boomers and all future retirees, your full retirement age is somewhere between 66 and 67 years old.

Finally, there is your age of claim. The SSA allows you to start taking social security benefits from retired workers at the age of 62, or anytime thereafter. And for each year you stop receiving benefits, your payment increases by about 8%, up to the age of 70. Assuming we were looking at two identical people with the same year of birth, work history and earnings history, the age of 70 could receive up to 76% more per month than the one who claims to be 62 years old.

However – and this is an important point – the goal is not to maximize what you will receive monthly from Social Security. Instead, you want to set yourself up to receive as much as you can on your life . This means that your financial and physical health, marital status and other factors may determine how old you are.

Now, understand that this social security trick comes with two notable conditions. First of all, in order to completely cancel your benefits, you will have to pay back every penny you have received from the SSA. If you made this choice, say 10 months after you started receiving benefits, you will have to repay the SSA 10 months of benefit checks. To add, this also includes anyone who could receive benefits as a result of your application, such as a spouse or children.

Second, as noted, there is a strict limit to which this removal clause can be invoked within 12 months of your date of eligibility. Prior to 2010, Social Security beneficiaries had years to decide if they wanted to withdraw their benefits and, at the same time, repay years of retiree benefits received. However, a policy change at the end of 2010 reduced the scope of this mulligan to just a 12-month window.

Although the SSA-521 form is not widely known, it can be an invaluable tool for those who regret having filed their application earlier than expected. And, if it's used correctly, it's a solid tip for increasing your payment even after you've initially claimed benefits.