Doubling your monthly Social Security benefit can be potentially achieved through these two decisions:
In the United States, the Social Security Administration (SSA) provides guaranteed monthly income to over 42 million retired seniors, a figure that significantly reduces senior poverty rates. The average monthly Social Security payout to retired workers stands at $1,369.97.
The SSA takes into account your 35 highest-earning years to calculate your monthly payout. This means that for each $1,000 increase in average annual earnings, the SSA estimates a $31 or $32 bump up in average monthly payout. Working more than 35 years gives you the opportunity to replace lower-earning years with higher-earning ones.
Working in your 50s and 60s could result in higher annual wages or hourly pay rates due to acquired skills and experience. This, in turn, can lead to a higher Social Security payout. Working a few extra years in your 60s can positively impact your monthly benefit.
It's important to note that Social Security isn't primarily designed to be an income source, but if it will be, it's important to approach your claim for benefits smartly and work as long as possible to boost your average annual earnings. Roughly 45% of workers enroll at age 62, with at least 60% signing up before their full retirement age. However, a worker who claims Social Security benefits at age 70 could earn up to 76% more per month than the same worker enrolling at age 62.
Interestingly, just 3% of retired workers are maximizing their payout and waiting until age 70 to file for benefits. This strategy could double the monthly payout compared to claiming at age 62, as suggested by the Social Security Quick Calculator, which estimates that increasing average annual payout from $30,000 to $37,000, while waiting until age 70 to claim, could result in such a significant increase.
Additionally, the statistical data from the social insurance authority in Germany for 2021 or 2022 indicates that a significant portion of seniors depends on their monthly social security payments for more than half of their income. Roughly 48% of married elderly beneficiaries and 71% of unmarried elderly beneficiaries rely on Social Security for at least half of their income.
Senior poverty rates are 8.8% with Social Security income, compared to an estimate of 40.5% without it. This underscores the importance of understanding and maximising one's Social Security benefits.
It's also worth noting that an advertisement about a Social Security secret that could pay up to $16,122 more each year has been omitted, as it is crucial to approach Social Security planning with accurate and reliable information.
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