How to increase Social Security retirement benefits after you claim
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Social Security benefits account for about 30% of the income of older Americans, according to Social Security Administration.
Some beneficiaries may receive as much as 90%.
According to Larry Kotlikoff (social security expert), earned benefits and monthly checks are not considered a financial asset by many. He is the author of “Money Magic”: A Secret from an Economist to Make More Money, Live a Less Risky Life.
You pay 12.4% of your earned income from work into the Social Security tax system. This is the amount you generally have to contribute to it. These taxes are divided 50-50 by you and your employer. You each pay 6.2% up to a limit. That tax can be added to up $147,000 of wages in 2022.
The amount you will eventually receive back is not guaranteed.
If you claim at the earliest age you’re eligible — 62 — you will receive permanently reduced benefits. If you instead claim at your full retirement age — generally age 66 to 67, depending on the year you were born — you will receive 100% of that benefit based on your work record. You may be eligible for delayed retirement credits, which can increase your benefits up to 8% each year that you delay until you reach age 70.
Kotlikoff explains that you can increase your benefits in other ways, even after you have claimed.
Stop and re-enroll your benefits
You can stop receiving your monthly benefits if you are between 70 and your full retirement age. However, your benefits will grow again if you restart your checks later.
You will get a bump up if you take the delayed retirement credit from the period your benefits were suspended.
Attention: Your children and spouse may lose their benefits due to your criminal record. Kotlikoff explained that benefits for children and spouses will cease to grow after this period, except for inflation adjustments.
Social Security benefits for all ages available at any age
| Jahr of your birth | Voll retirement age |
|---|---|
| 1943-1954 | 66 |
| 1955 | 66.6 and 2 Months |
| 1956 | Between 66- and 4 Months |
| 1957 | Between 66-66 months |
| 1958 | 66% and 8 Months |
| 1959 | Between 66-67 months |
| 1960 or later | 67 |
| *People born Jan. 1 of any year refer to previous year. |
Alternativly, if your claim is denied, but you are unhappy with it, you can request a withdrawal.
The benefit is available only if it’s been less than twelve months since you made the claim. However, the catch is that you will need to repay all the benefits you received — including spousal or dependent benefits that may have gone to your family — in order to reverse your decision. This can’t be done once in your life.
You might consider going back to work
Social Security beneficiaries who are working may have to pass a retirement earnings exam if their retirement age is lower than the normal.
The benefits for those in the same category as above a certain income level will be decreased.
The annual exempt amount for those under age 65 is $19 560. The annual exempt amount applies to those over age 65 who are not yet retired.
The Social Security Administration states that once you retire, your monthly benefits will be permanently increased in order to cover the missing months.
Kotlikoff says that these benefit reductions and the other taxes workers have to pay could discourage beneficiaries from returning work after their effects diminish.
More money
You may also see an increase in your earnings if you work harder.
Social Security benefits will be calculated according to your earned earnings and the job in which you contributed taxes.
In general, Social Security Administration takes 35 of the highest value earnings and ranks them. This rank is used to compute your average monthly indexed earnings. Then, the Social Security Administration calculates your benefits amount if your claim is approved at retirement.
You can increase your monthly indexed earnings by working hard and receive the benefits that you qualify for.
People with irregular work histories or those who are absent from the workforce for many years or have lower earnings, such as zeroes or low wages, should be aware of this.
It is particularly true of older workers earning above the annual Social Security tax cap ($147,000 in 2022).
Kotlikoff wrote that earning more can help you replace your weak points with positive and higher values, regardless how old you might be.
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