How much more can you get if you wait to collect Social Security benefits?
When it comes to Social Security, the most important decision you will have to make is when to begin claiming benefits. You can begin claiming benefits at the age of 62, which is considered early.
As a result, you’ll receive the smallest possible Social Security benefit because, depending on your earnings history, you’ll have to begin drawing benefits years before “full retirement age.”
This is the age at which most people are eligible to begin receiving their “full” retirement benefits, which is typically around the age of 67.
The only way to get an accurate idea of your retirement benefits is to visit SSA.gov and use their retirement calculator.
This is because everyone’s earnings history is unique. The tool estimates how much money you’ll receive at ages 62, 67, and 70 based on your current income (70 being the latest distribution age).
The difference in benefits between collecting at 70 and 62 can be as much as 30% higher.
For a real-world scenario, Heather Schreiber of HLS Retirement Consulting crunched the numbers. If you’re a 61-year-old single taxpayer making $100,000 a year, Investors.com estimates your first-year benefit at $20,075.
Also Read: How Can I Find Out More About the Social Security Administration (SSA)?
Social Security calculators use average yearly earnings going back in time for every single $100,000-earning 61-year-old filer, Investors.com has reported. If the information is incorrect, you can request a correction through your personal social security account.
People with the same profile can expect to receive $31,658 a year in retirement. The benefits would begin at $41,668 per year if the same person waited until the age of 70.
Between ages 62 and 70, you could have collected $186,131 in benefits, according to Schrieber’s estimates.
A 2% COLA is based on the average inflation rate in the United States. The number would be even higher if you included last year’s inflation rate.
A person’s lifetime money distribution will be roughly the same, but those who can wait to claim benefits will benefit most from the significant difference listed above.