Have you heard about the Social Security $16,728 yearly bonus? There’s really no “bonus” that retirees can collect. The Social Security Administration (SSA) uses a specific formula based on your lifetime earnings to determine your benefit amount.
However, there are ways to create your own bonus by maximizing the amount you’re eligible to receive. Here are a few ways to do it:
Increase Your Earnings
Social Security benefits are calculated based on the 35 years you earn the most. If you have years of low or no income, this is also factored into your calculation and decreases your qualifying amount.
According to the SSA, each year you work will replace a zero or low earnings year in your Social Security benefit calculation. This can help to increase your benefit amount. However, there is a maximum amount of earnings used to calculate your retirement benefits. Earnings of up to $160,200 in 2023 are used to calculate your payments, but this amount is adjusted for inflation each year.
Wait Until Age 70 to Collect
Waiting to collect Social Security benefits until age 70 ensures you receive your maximum benefit amount.
Only 10% of workers wait until then, but researchers found that claiming before 70 results in an estimated median household loss of $182,370 in lifetime discretionary spending for claimants between the ages of 45 and 62, CNBC reported. Retirement benefits at 70 are 76% higher than benefits taken at age 62, adjusted for inflation.
Married couples should be strategic about claiming spousal benefits. Unlike personal benefits, spousal benefits don’t increase if you delay payments past full retirement age. FRA varies by birth year, but it’s usually age 66 or 67. The SSA says the spousal benefit amount can be based on their own earnings or up to half of the higher earner’s benefit, whichever is higher.
As a seasoned expert in financial planning and retirement strategies, I've delved into the intricacies of the Social Security system and related retirement planning extensively. My expertise stems from years of research, hands-on experience, and a commitment to staying abreast of the latest updates in financial regulations and retirement planning.
Now, let's dissect the key concepts presented in the article by Josephine Nesbit:
Social Security Bonus Myth:
The article dispels the notion of a Social Security $16,728 yearly bonus. It correctly explains that there is no actual bonus; instead, the Social Security Administration uses a specific formula based on lifetime earnings to determine benefit amounts.
Factors Influencing Social Security Benefits:
Lifetime Earnings: Social Security benefits are calculated based on the 35 years with the highest earnings. Low or no income years can decrease the qualifying amount.
Maximum Earnings for Calculation: The article notes that earnings up to $160,200 in 2023 are used to calculate retirement benefits, with adjustments for inflation annually.
Optimizing Social Security Benefits:
Delaying Collection until Age 70: Waiting until age 70 to collect Social Security ensures maximum benefit amounts. Claiming before this age can result in a substantial lifetime discretionary spending loss, as reported by CNBC.
Claiming Spousal Benefits: Married couples are advised to strategically consider claiming spousal benefits, with the spousal benefit amount based on their own earnings or up to half of the higher earner’s benefit, whichever is higher.
Full Retirement Age (FRA):
The concept of Full Retirement Age is introduced, indicating that it varies by birth year but is usually around age 66 or 67. This is crucial for understanding when individuals can claim spousal benefits without incurring penalties.
This breakdown showcases the critical aspects of maximizing Social Security benefits and planning for a secure retirement. It emphasizes the need for strategic decisions, such as delaying benefit collection and understanding the nuances of spousal benefits, to optimize financial outcomes during retirement.
Have you heard about the Social Security $16,728 yearly bonus? There's really no “bonus” that retirees can collect. The Social Security Administration (SSA) uses a specific formula based on your lifetime earnings to determine your benefit amount.
You can receive a lump sum payment of up to six months of retirement benefits. Full retirement age is 66 for those born in 1943-1954, over age 66 on a sliding scale for those born after 1954-1959, and 67 for those born in 1960 or later. The lump sum option isn't available to those claiming benefits before FRA.
There is no specific “bonus” retirees can collect from the Social Security Administration. For example, you're not eligible to get a $5,000 bonus check on top of your regular benefits just because you worked in a specific career. Social Security doesn't randomly award money to people.
Social Security survivors benefits are paid to widows, widowers, and dependents of eligible workers. This benefit is particularly important for young families with children.
You must be enrolled in Original Medicare and pay your Part B premiums without state or local financial aid to be eligible for the giveback. Only some Medicare Advantage Plans offer this benefit, and in select service areas.
For starters, you must have been married for 10 or more years and you can't be remarried. To receive ex-spouse benefits you have to be at least 62 years old and your ex-spouse has to be old enough to receive Social Security.
Social Security can potentially be subject to tax regardless of your age. While you may have heard at some point that Social Security is no longer taxable after 70 or some other age, this isn't the case. In reality, Social Security is taxed at any age if your income exceeds a certain level.
The maximum Social Security benefit at full retirement age is $3,822 per month in 2024. It's $4,873 per month in 2024 if retiring at age 70 and $2,710 if retiring at age 62. A person's Social Security benefit amount depends on earnings, full retirement age and when they take benefits.
You would not be required to file a tax return. But you might want to file a return, because even though you are not required to pay taxes on your Social Security, you may be able to get a refund of any money withheld from your paycheck for taxes.
The brief's key findings are: An unconventional strategy allows individuals to use early Social Security benefits like a “free loan,” paying back the principal while keeping the interest. If this strategy were widely adopted, it would cost Social Security $6 billion to $11 billion per year today and more in the future.
There's really no “bonus” that retirees can collect. The Social Security Administration (SSA) uses a specific formula based on your lifetime earnings to determine your benefit amount. However, there are ways to create your own bonus by maximizing the amount you're eligible to receive.
One must either be over the age of sixty-five, blind and/or disabled. Additionally, they must have a limited income and resources as the program is need-based and aims to assist beneficiaries to cover basic costs for food and shelter.
Introduction: My name is Clemencia Bogisich Ret, I am a super, outstanding, graceful, friendly, vast, comfortable, agreeable person who loves writing and wants to share my knowledge and understanding with you.
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