How To Get More Benefits From Social Security

How To Get More Benefits From Social Security – Retirement can cost 70-80% of your current income annually. For many, social security is an important source of finance. Learn tips on how to make the most of your benefits.

Because this information will be used to calculate your benefits, make sure all of your earnings are correctly recorded on your Social Security Income Statement.

How To Get More Benefits From Social Security

Each year you delay claiming past age 62, your benefit increases until it reaches its maximum at age 70. This forms the basis for the benefits you will receive for the rest of your life. Note that your full retirement age (FRA) depends on your birth year.

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For those born between 1943 and 1954, claiming at age 62 results in a reduction in your benefit of about 25% compared to claiming at your FRA of 66 (100%), while waiting until age 70 years your performance increased by almost 32%.

Your benefits are based on your highest 35 years of earnings. If you worked less, the years off are assigned a zero.

Consider working longer hours to negate any zeroes, or to continue to reap the benefits of peak earning years if you find yourself in them. Both can help increase your benefits for life.

If you are married, you are entitled to your own benefits or 50% of your spouse’s benefits at FRA, whichever is greater.

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If you were married for at least 10 years and have not remarried, you could benefit by claiming benefits based on your ex-spouse’s income record. To qualify, your benefits must be less than what you would receive based on your ex-spouse’s earnings records, and you must be at least 62 years old.

If you work while receiving Social Security benefits and earn above the IRS income limit before you reach your FRA, your benefit will be reduced by $1 for every $2 you earn over the limit. Please note that your benefits will be recalculated when you reach your FRA.

A portion of your Social Security benefits may be subject to federal income tax if you have significant income from other sources (e.g., wages, interest, dividends) in addition to your benefits. Keep an eye on your provisional income and earnings limits and contact your tax advisor.

Everyone’s situation is unique and there are many factors (e.g., your savings, your health, expected longevity, income needs, etc.) that you must consider when determining what role Social Security will play in your retirement income strategy.

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Contact an investment financial advisor who can help you explore your options and develop a customized retirement plan that takes all of your income sources into account. Call 855–INVEST or stop by your local branch today.

This material is intended to be educational and does not constitute legal, tax, accounting or investment advice. Investments and its affiliates and providers do not provide legal, tax or accounting advice.

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Securities products, brokerage services and managed account advisory services are offered by Investments LLC, a registered broker-dealer and registered investment advisor and member of FINRA and SIPC. Annuities and other insurance products are offered through Insurance Services, LLC, a licensed insurance agency. For the 70 million Americans who receive Social Security, experts say the significant increase in benefits planned for 2023 is highly anticipated and very welcome.

Social Security recipients, most of whom are over 65, have seen higher payments almost every year for more than four decades to keep up with the costs of inflation. When inflation is low – as it has been over the last decade – these cost of living adjustments (COLAs) are quite small. But last year the increase was big, and this year it’s even bigger.

To help cover the rising costs of food, housing, health care and other essentials, the Social Security Administration announced Thursday that beneficiaries would receive an 8.7 percent increase in their monthly payments. In a sign that the Federal Reserve’s efforts have not yet worked to break the elevated inflation rate, the Bureau of Labor Statistics also released its consumer price index for September on Thursday, showing that prices rose 8.2 percent last year are.

The 8.7 percent increase in social security contributions in 2023 will be the largest increase in more than 40 years. Artwork by Jenna Cohen and Megan McGrew.

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The 2023 COLA is the largest increase since 1981 — when inflation was higher than it is today — and the fourth-largest increase ever.

Here’s a look at how the new COLA was calculated, how it affects people who receive Social Security benefits, and what problems those people may still face.

The rise in the cost of living is a purely mathematical formula – even if that’s not always the case, said William Arnone, CEO of the National Academy of Social Insurance.

Social Security was created in the 1930s, but Congress first increased Social Security payments in 1950 and continued to do so every few years for more than two decades, according to the SSA. In 1972, President Richard Nixon signed a law that tied annual increases to consumer prices.

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Since then, the Bureau of Labor Statistics has compared the average consumer price index for workers for July, August and September of the current year with the average value for the previous year. According to the Social Security Administration, this percentage change then becomes an annual increase in Social Security payments. COLAs cannot be negative; If the percentage change decreases, there is no COLA.

Inflation had already started to rise at the end of 2020, which is why payments increased by 5.9 percent in 2021. As prices soared in 2022, a major cost of living adjustment was expected before it was confirmed on Thursday.

The impact could be enormous, experts say. According to the SSA, the average retiree will see a monthly increase in payments of about $144, and the average monthly payment to a retiree will be $1,827.

The more than 70 million Americans who receive Social Security payments, Supplemental Social Security payments or both will see this increase starting in either December or January.

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According to the SSA, 55 percent of Social Security recipients in 2021 were women. And although the vast majority of these Americans are retired, about 3 million children also receive Social Security benefits. Others receiving payments include people with disabilities and people who have lost their spouses.

Of the 70 million Americans receiving Social Security benefits, more than three-quarters are age 65 or older. Artwork by Jenna Cohen and Megan McGrew.

The estimated average payment for a widow with two children will increase from $3,238 to $3,520, and the average payment for disabled workers will increase from $1,364 to $1,483, according to the SSA.

Another key change will be the reduction in Medicare Part B premiums, said Mary Johnson, Social Security and Medicare policy analyst at the Senior Citizens League.

Social Security Disability Benefits Pay Chart (2023)

“We have never seen this combination before, and this may be the only time we ever see it,” Johnson said. “So I encourage everyone to appreciate it.”

Many people assume their Medicare premiums will eat up a significant portion of their COLA, but that won’t be the case this year, Johnson said.

Low-income people are still struggling with high prices, she said, and increasing the cost of living won’t fully alleviate that. But the rapid increase in payments will definitely help people, she added, especially as heating costs rise and winter approaches.

“I encourage people to contact their local family services department [and] Medicaid offices to learn about low-income heating and fuel assistance programs and to apply now. “This is the time of year to do that,” she said.

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It is currently not clear whether higher social security contributions will contribute to rising inflation. But Arnone said older people are much more likely to spend than save, giving his organization a “clear feeling that it will help mitigate a recession.”

Every month this year, the cost of inflation has far exceeded the 5.9 percent cost of living increase set for the end of 2021, Johnson said. This means that last year’s COLA does not address the current economic burdens.

Social Security benefits are a one-size-fits-all solution, but people’s actual needs vary by region, race, age and other population differences, Arnone said. Older people tend to be more affected by inflation than younger people.

“They tend to have to pay for things that fall into higher inflation categories, with health care being the No. 1 example,” Arnone said. For example, eye care costs rose 3.2 percent from August to September, the largest increase on record, according to the Associated Press.

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One drawback to calculating the COLA is that it is based on the consumer price index for workers, Arnone said, which doesn’t always reflect how older people spend their money.

He pointed to the Elder Index, a research project of the Gerontology Institute at the University of Massachusetts Boston, as a potentially more accurate measure of how older people are struggling financially with housing, transportation, health care and food costs. But

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