Social Security Bonus: Many Americans are trying to figure out how to get the most out of their Social Security payouts. The $16,728 Social Security bonus is one phrase that has been in circulation.
This sum represents the possible increase in lifetime benefits that certain people would obtain if they deliberately postponed filing their Social Security claims.
It’s crucial to realize that this “bonus” is an increase in the total amount you could get over the course of your retirement years rather than a one-time payment. Here’s how it operates and how you can be eligible.
How Does the Social Security Bonus of $16,728 Operate?
The potential increase in benefits by postponing the beginning of Social Security payments from the earliest eligible age of 62 to the age of 70 is known as the $16,728 bonus.
Your monthly payout rises by roughly 8% year if you wait to claim because of delayed retirement credits. Over time, this approach can yield a substantial cash benefit, particularly for those who live longer into retirement.
Here’s an illustration:
- The total lifetime benefits you could receive from Social Security could increase by $16,728 over your retirement years if you decide to postpone receiving payments until age 70 rather than starting at age 62.
How to Get the Increase of $16,728?
You must adhere to a few crucial tactics in order to get this bonus:
- Wait until you are 70 years old to claim your benefits. You can raise your monthly benefit amount by almost 8% annually by deferring your payments from age 62 until age 70. Over time, this accumulates and may result in the $16,728 bonus or more.
- Make sure you work for thirty-five years. Your top 35 years of earnings are used to calculate your Social Security payments. Your average monthly earnings (AIME) will be reduced if you have less than 35 years of work experience since years during which you have not earned any money will be counted as 0. Benefits will increase with further years of high earnings.
- Achieve the Highest Allowable Income Your lifetime earnings are used to compute your Social Security payments. Your monthly benefits will rise if your annual taxable income is the highest. The maximum taxed income in 2024 is $160,200.
- Make the Most of Spousal Benefits You might qualify for spousal benefits if you’re married. A spouse can make a substantial contribution to the total benefit amount if they have a better lifetime earnings history. To optimize both of your Social Security benefits, work alongside your spouse.
- Steer clear of early work penalties. Your benefits could be lowered depending on your earnings if you continue to work after you reach your Full Retirement Age (FRA) and make a claim before then. Some of your benefits will be withheld if you make more than the annual cap but are below FRA.
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Advantages of Postponing Social Security
In addition to increasing your monthly benefit, delaying Social Security until age 70 can boost your retirement security. Here’s how:
- Greater Monthly Payments: If you wait, your payments will be greater, which may help you avoid running out of money in the future.
- More Money Over Time: The total lifetime benefits could be significantly greater than what you would have gotten if you had begun benefits sooner if you live long enough to reach later years.
- Protection from Inflation: Because Social Security benefits are adjusted for inflation, delaying your claim can assist your benefits keep up with growing living expenses.
Is there a guarantee for the $16,728 bonus?
Although $16,728 is a possible bonus, it’s crucial to realize that it’s not a one-time payment that is assured. Your wages, job history, and the length of time you wait to claim benefits are some of the variables that affect the amount.
The extra benefits you can eventually get by postponing your claims are known as the bonus.
How to Determine Your Anticipated Social Security Benefit
Consult your Social Security statement to find out how much you might be eligible to receive. You can use the Social Security Administration’s (SSA) web portal to view your earnings history, customized benefit amounts, and the impact of various claiming ages on your benefits.
A preliminary estimate of your monthly payout at various claiming ages can also be obtained by using the SSA’s Retirement Estimator.
