The Average Retiree Gets $2,083 Per Month, But 1 Decision Could Add Hundreds More

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For many retirees, Social Security serves as a critical source of income. In fact, the average retired worker currently receives about $2,083 per month in benefits. While that monthly payment can help cover essential expenses, many retirees would be in a better place if they had larger Social Security checks coming their way.

The good news is that one key decision could have a significant impact on how much money you receive from Social Security each month — when you choose to sign up for benefits. And if you play your cards right, your checks could be hundreds of dollars a month greater.

Delaying your Social Security claim could have a huge payoff

The earliest age to claim Social Security is 62. And once you reach full retirement age (FRA), you’re entitled to your monthly benefits without a reduction. FRA is 67 for anyone born in 1960 or later.

But you don’t have to claim Social Security at FRA. You’re allowed to delay your filing beyond that point. And for each year you wait, your monthly benefits get a permanent 8% increase.

Now unfortunately, you can’t delay your Social Security claim indefinitely for larger checks. Once you turn 70, there’s no more boosting your benefits.

But still, if you have an FRA of 67, filing for Social Security at age 70 raises your monthly paychecks by 24%. And that increase could be a game-changer for your retirement.

Let’s say you’d normally get $2,083 a month in Social Security at FRA. If you were to delay your claim until age 70, you’d get $2,583 per month instead. That’s a $500 monthly increase, or another $6,000 per year.

Remember, too, that Social Security benefits are eligible for a cost-of-living adjustment (COLA) every year. The larger your benefits are, the more each COLA is worth.

If benefits get a 3% COLA, for example, and your monthly check is worth $2,083, it’s an extra $62 per month in your pocket. With a $2,583 monthly benefit, a 3% COLA gives you an additional $77 per month.

Is delaying Social Security the right choice for you?

While delaying Social Security could add hundreds of dollars to your monthly benefits, it’s not automatically the right choice. For one thing, you may not be able to work until age 70. And if that’s the case, you’ll need a way to fund your retirement in the interim.

If you have a lot of savings, that may not be a problem. If you don’t, you could risk depleting your nest egg to make a delayed claim possible.

Your health and life expectancy should also play a role in your decision. Because delaying Social Security increases future payments, people who expect to live longer often benefit the most from waiting to take benefits.

But if you have health issues and don’t anticipate living such a long life, then you may be better off claiming Social Security on time or even early, as doing so could lead to more lifetime income.

That’s why you need to look at the big picture before assuming that a delayed Social Security claim is your best choice. But what you should know is that the option exists, and that it could raise your monthly benefits quite substantially.

You’ll need to see if the risks of waiting on benefits outweigh the peace of mind that comes with locking in checks that are hundreds of dollars a month higher.

The post The Average Retiree Gets $2,083 Per Month, But 1 Decision Could Add Hundreds More appeared first on 24/7 Wall St..