If you are currently receiving Social Security benefits or are nearing retirement, you may be familiar with the “$18,984 Social Security bonus.” It’s a figure that has been drawing interest, but what is it and is it attainable?
The $18,984 Social Security Bonus: What s It?
It’s crucial to make clear right away that this isn’t a bonus check that every retiree receives from the government. The term “$18,984 bonus” describes a possible rise in your Social Security income that depends on how and when you make your claim.
This number is sometimes derived from studies that demonstrate that retirees who use clever claiming techniques to optimize their benefits can earn up to $18,984 more annually than those who do not.
It’s an illustration of how much more money you may earn each year by making wise selections; it’s not a one-time reward.
How Do You Open It?
Retirees may increase their Social Security benefits in the following significant ways:
- Benefits of Delaying Claiming: Your Social Security benefits will increase in size each month if you wait until you are 70 years old to begin receiving benefits. Your benefits could be reduced by up to 30% if you claim at the earliest age of 62, but they could increase by up to 32% if you wait until you are 70.
- Put in at least 35 years of work: Your 35 highest-earning years are used by Social Security to determine your benefit.
- Your average earnings—and your monthly benefit—may suffer: if you have less than 35 years of work history since the years that are absent are counted as zeroes. Increase Your Income Over Time Increasing your income over time, particularly during your prime working years, can have a big influence on your Social Security checks because your benefit is based on your past earnings.
- Steer Clear of Typical Errors: By filing claims too early or failing to coordinate with a spouse, some people unintentionally lower their benefits. For instance, married couples can maximize their overall household income by using special tactics like “file and suspend” or spousal benefits.
- Pay Attention to Taxes: If your income exceeds specific limits, up to 85% of your Social Security benefits may be subject to taxes. Keeping your benefits as tax-free as possible can be achieved by controlling withdrawals from retirement accounts or other taxable income sources.
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Do You Have Too Much Time?
You may still be able to make changes even if you have already begun receiving benefits. You can withdraw your application and reapply later if you haven’t received payments for more than a year, but you will have to pay back the benefits you have already received.
Taking the time to learn about your alternatives if you’re still saving for retirement can result in thousands more dollars in lifetime benefits.
