BIG UPDATE: Increase $450 in Social Security checks – There’s 1 way retirees can get it and it’s not through COLA
An annual boost from the cost-of-living adjustment (COLA) can be a welcome relief for millions of beneficiaries. However, there’s another potential way to increase Social Security checks by up to $461 that many Americans might not know about. While retirement benefits from Social Security are adjusted for inflation nearly every year, these adjustments are often modest. For instance, last year, the average benefit increased by $59 per month, and projections for the COLA in 2025 suggest it may be significantly lower. Thankfully, retirees have alternatives to enhance their Social Security benefits beyond COLAs.
Understanding the Option to Increase Social Security Payments
The amount of your Social Security checks is influenced by the age at which you enroll. The age at which you qualify for your full Social Security benefit is referred to as your full retirement age (FRA), which currently ranges from 66 to 67 for today’s workers. While you can claim benefits as early as age 62, doing so results in reduced payments. Specifically, for the first 36 months after claiming early, you incur a deduction of 5/9 of 1% for each month. Additionally, claiming before your FRA incurs an extra deduction of 5/12 of 1% per month. Consequently, individuals who claim benefits immediately may face a 25% to 30% reduction in their monthly checks.
On the other hand, you can delay claiming Social Security benefits until age 70, during which your monthly payments increase by two-thirds of 1% for each month you wait. Although early filing may be necessary for some due to financial constraints or health issues, delaying your application generally leads to a higher lifetime benefit.
The Financial Impact of Suspending Benefits
For example, consider a 67-year-old with an average monthly Social Security benefit of $1,919. If they choose to suspend their benefits and resume at age 70, their monthly payment would increase by approximately $461, totaling $2,380 per month. While they would miss out on over $69,000 in payments during the suspension period, the long-term financial gain could outweigh these losses. By delaying benefits, they would receive approximately $428,400 from ages 70 to 85, compared to $414,504 if they had not suspended their benefits.
Evaluating Whether to Suspend Benefits
Deciding to suspend Social Security benefits hinges on several factors, particularly life expectancy estimates and financial stability. A significant consideration for many seniors is whether they can afford to forgo Social Security income temporarily. More than one-third of individuals aged 65 and older rely on Social Security for at least half of their retirement income, making it challenging for many to skip these checks for an extended period.
However, seniors who are still working while receiving Social Security benefits may find it easier to suspend this income. While the optimal strategy is to delay for three years, it doesn’t have to be an all-or-nothing decision. Benefits can be put on hold for a year or even a few months, which, although resulting in a smaller increase, will still provide a permanent boost to future Social Security payments.
