If you’re already receiving Social Security but regret claiming your benefits too early, there’s good news: you have options to boost your checks by as much as 24%. Understanding how to strategically suspend and delay your benefits can make a significant difference to your lifetime income.
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How Delayed Retirement Credits Work
When you claim Social Security benefits before reaching your full retirement age (FRA), your monthly checks are smaller. However, if you regret claiming early, you can still increase your benefits by suspending them once you hit FRA. By suspending your benefits, you earn delayed retirement credits, which grow your benefits by 8% per year until you reach age 70, up to a maximum 24% increase.
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For example, if your FRA benefit is $2,000 per month, but you claimed early at age 62 for $1,400, suspending your benefits at 67 could increase your monthly check to $1,736 by age 70, a $336 bump each month. While this is not as large as the original benefit, it’s a substantial increase over what you initially received.
The One-Time Do-Over
If you’ve only been receiving Social Security for less than a year, you have another option: you can withdraw your claim entirely. This one-time do-over allows you to return the benefits you’ve already received, and the government will act as if you never applied. Once you reapply, your future checks will be larger, as though you’d waited until a later age to start collecting benefits.
However, this strategy is not for everyone. The drawback is that you must repay all the benefits you’ve received, which can be challenging for those who have already spent the money. This option is only available within the first 12 months of claiming, so if you’ve been receiving Social Security for more than a year, this strategy isn’t viable.
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The Trade-Off: Can You Afford to Wait?
The main trade-off with these strategies is that you must go without Social Security income for a period of time. If you’re still working or have sufficient savings, delaying benefits might be a good choice. However, many retirees cannot afford to pause their benefits for several years. If this is your situation, consider delaying your benefits for just a few months to increase your checks slightly.
Additionally, while delaying benefits might increase your monthly amount, your Social Security payments will still rise each year due to cost-of-living adjustments (COLAs), so even if you claim early, your benefits will gradually grow over time.
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Making the Most of Your Social Security
Maximizing your Social Security benefits requires careful planning, and understanding how delayed retirement credits work can help you boost your future monthly checks by as much as 24%. While there are limitations and trade-offs, delaying your claim or suspending your benefits might be one of the best strategies to ensure a higher lifetime benefit. If you’re unsure of the best course of action, consider consulting with a financial advisor to determine what makes the most sense for your unique situation.
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