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3 Ways to Boost Your Social Security Benefits in Your 60s
The Motley Fool ^ | Aug 2, 2018 at 7:21AM | Sean Williams (TMFUltraLong)

Posted on 08/02/2018 10:02:18 AM PDT by Red Badger

It's not too late to increase your take-home from America's most important social program.

There's a really good chance you'll be reliant on Social Security when you retire. According to data from the Social Security Administration, 62% of today's aged beneficiaries lean on the program to provide at least half of their monthly income. Of these folks, 34% rely on Social Security for virtually all of their income (90% to 100%).

As for future retirees, national pollster Gallup found a strong expected reliance in an April 2018 survey. When polling nonretirees, Gallup observed that 30% expect Social Security to be a "major source" of income during retirement, with another 54% forecasting it to be a "minor source" of income. Overall, this combined 84% that will need Social Security in some capacity when they retire ties a high-water mark for nonretirees over the past 15 years.

Yes, you can still boost your Social Security benefits while in your 60s

Because of its clear importance, few things have a higher priority for seniors in their 60s than getting as much as possible from the Social Security program. But what you may not realize is that folks in their 60s still have options available that can help boost their eventual monthly and/or lifetime payout. If you're in your 60s, or nearing your 60s, here are three ways you can still boost what you'll receive. 1. Be patient

Without question, the easiest way to increase what you'll be paid by Social Security is to simply be patient.

You see, eligible beneficiaries -- those who've earned the 40 lifetime work credits required to receive a retired worker benefit -- can begin receiving their payout at age 62, or any point thereafter. There is, however, a big incentive to hold off on claiming benefits early. For each year that you simply wait, your eventual monthly benefit, which is based on your work and earnings history, will grow by approximately 8%, up until age 70.

Depending on your birth year, claiming as early as possible, at age 62, could mean accepting a 25% to 30% permanent reduction in your monthly payout. Conversely, waiting until age 70, the last point at which benefits continue to accrue, might net a 24% to 32% bonus over what you would have received at your full retirement age (FRA). Your FRA is the age that you're eligible to receive your full retired worker benefit, and it's determined by your birth year.

If we were to look at two identical individuals with the same birth year, income, and length of work history, the one claiming at age 70 could take home 76% more per month than the one claiming at age 62.

2. Take advantage of your work experience and skills

Other than simply waiting, another consideration to make is to work longer.

Now, I fully understand that not all senior citizens want to be in the workforce in their 60s, and that's perfectly OK. But here's an important point to keep in mind: By your 60s, you'll have amassed a lifetime of skills and work experience that may allow you to command a higher hourly wage or salary.

Why's this important? As noted, your retired worker benefit takes into account your work and earnings history. Specifically, your 35 highest-earning, inflation-adjusted years are what will determine your benefit at full retirement age. For each year less of 35 worked, a zero ($0) is averaged in. Therefore, working a few extra yeas, if you don't have 35 years of work under your belt, could provide a healthy boost to your eventual payout.

In addition, landing a well-paying job in your 60s with your acquired skills and experience could help replace a lower, inflation-adjusted year of income from when you were younger and lacked the skills or work experience to be paid a good wage. This could lift your average annual payout over your 35 highest-earning years.

3. Don't forget about SSA-521

Finally, don't forget about Social Security's secret weapon, Form SSA-521, which is officially known as the Request for Withdrawal of Application.

As the title implies, this form gives beneficiaries the right to request that their benefits claim be undone within the first 12 months of receiving benefits. Should the Social Security Administration grant the request, it'll be as if the original payouts never occurred. In other words, your eventual payout will again be growing at approximately 8% per year until you do decide to claim it in the future.

There is, of course, a catch. To qualify, you'll have to repay every cent you, or someone who's made a claim based on your earnings history -- such as a spouse -- have received. And, as pointed out, you have to do this within the first 12 months of receiving benefits.

This Social Security mulligan can be particularly useful if you regret your decision to enroll early for benefits, but land a well-paying job within 12 months. This job, which can cover your daily expenses, may allow you to undo your claim and repay what you've received from Social Security. More importantly, your benefits will keep growing.

Just because you're in your 60s, it doesn't mean you lack the flexibility to increase your Social Security payout.


TOPICS: Business/Economy; Education; Health/Medicine; Society
KEYWORDS: 401k; ira; retirement; socialsecurity
FYI.........................
1 posted on 08/02/2018 10:02:18 AM PDT by Red Badger
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To: Red Badger

Take it at 62...if you wait until 70 or so you won’t break even until your late 70’s. If you don’t need it at 62 take it anyways and dollar cost average it into good investments or give it to your kids or some humane society.


2 posted on 08/02/2018 10:14:47 AM PDT by Bonemaker (invictus maneo)
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To: Red Badger

At full retirement age (FRA), there is no penalty for continuing to work while claiming your benefit at the same time. A colleague has done this for the past 6 years to create a cushion plus do some traveling. He has just now actually retired to consult and do some real estate work while claiming his state retirement benefits from 23 years in that job.


3 posted on 08/02/2018 10:23:25 AM PDT by T-Bird45 (It feels like the seventies, and it shouldn't.)
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To: Red Badger

“There is, however, a big incentive to hold off on claiming benefits early.”

To wait from 62 to 65, you leave over 100k on the table based on the years you’re NOT collecting. That’s an incentive? LOL!! You’ll be lucky to get a check if you wait til 65.


4 posted on 08/02/2018 10:37:55 AM PDT by WKUHilltopper
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To: Red Badger

bookmark


5 posted on 08/02/2018 10:43:53 AM PDT by Jolla
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To: WKUHilltopper

The one taking at 70 (vs 62) will have missed out on (12 x 8 = ) 96 months of benefits.


6 posted on 08/02/2018 10:51:18 AM PDT by ETL (Obama-Hillary, REAL Russia collusion! Uranium-One Deal, Missile Defense, Iran Deal, Nukes: Click ETL)
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To: T-Bird45

My FRA is 67, hades will freeze before I even think about working full time till then.

Iam 56, fully vested and have 35.5 years in now. I am thinking next June.

To hell with this, I’ve pulled the Cart long and hard enough. Time for some slacker to strap on the yoke. Had Quad CAB surgery in March. I am tired. Need to go fishing.

SSI is just my spending money anyhow...


7 posted on 08/02/2018 10:55:40 AM PDT by VRWCarea51 (The Original 1998 Version)
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To: Red Badger

This so-called salary boast is always looked at in a vacuum. Few ever discuss where someone’s living expenses will come from by holding off from collecting SS. Any money spent from investments and savings ends up making those amounts less at the time you start SS, plus the loss of compounded income on the reduced amounts.


8 posted on 08/02/2018 11:09:08 AM PDT by CatOwner
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To: Red Badger

Solutions 1 & 3 are close to the same thing.
Solution 3 seems as though you are essentially taking and then repaying a loan. Lots of details and paperwork to really make it work.


9 posted on 08/02/2018 11:21:12 AM PDT by lee martell
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To: lee martell

#3 is really a crap-shoot..........


10 posted on 08/02/2018 11:24:52 AM PDT by Red Badger (July 2018 - the month the world discovered the TRUTH......Q Anon)
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To: Bonemaker

Take it at 62...if you wait until 70 or so you won’t break even until your late 70’s.


Yes. If you bank the SS money you get from 62-66, or later, in an account where you get 5%, your income will be the same at 66. Plus, you get to keep the money that you put in the account- it goes to your estate.

When you die with SS, you do not pass anything on to your estate.


11 posted on 08/02/2018 12:14:21 PM PDT by marktwain (President Trump and his supporters are the Resistance. His opponents are the Reactionaries.)
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To: Bonemaker
I've not taken my "benefit" yet...still working part time, and I'm 64....

I do not want to give any more to Uncle Sam than I have to...

many people look at the 62 age thing WRONG....

if your goal is to get "every single penny " back, then file and collect at 62...

but if your goal is to be financially well ahead, to keep active, to keep your social contacts, to keep your health insurance, life insurance a little longer, working late makes all the sense...

because one can make far more money WORKING than collecting the measly SS handout....far more....at least I can...

12 posted on 08/02/2018 12:14:54 PM PDT by cherry (official troll)
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To: ETL
the one working til 70 may loose out on SS..but will have made far, far more money than stopping work and collecting.......think about it.....

SS is really a pittance....

13 posted on 08/02/2018 12:17:03 PM PDT by cherry (official troll)
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To: Red Badger
The increase if you wait past nominal retirement age works out to roughly 8% a year until the max is reached (currently at 70). Taken by itself that sounds pretty impressive, but against that you have to weigh the five or so years of benefits you don't draw. My personal break-even point is around 86 years of age. YMMV.

It's widely believed that SS benefits aren't means-tested but that isn't quite true. If you have other income (i.e. a 401(K) or pension or other retirement savings that you'd BETTER have) at some point the SS benefits are taxed as income. Factor that into your numbers when you're running them prior to retirement.

14 posted on 08/02/2018 12:27:18 PM PDT by Billthedrill
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To: Red Badger

"waiting until age 70, the last point at which benefits continue to accrue, might net a 24% to 32% bonus"

"the one claiming at age 70 could take home 76% more per month than the one claiming at age 62."

I am not a mathematician but this doesn't add up to me?


15 posted on 08/02/2018 12:48:12 PM PDT by John 3_19-21 (Opinions do not change the world, change requires action.)
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To: cherry

Lol! You’re right. I needed to THINK about it. Obviously I didn’t.


16 posted on 08/02/2018 1:11:13 PM PDT by ETL (Obama-Hillary, REAL Russia collusion! Uranium-One Deal, Missile Defense, Iran Deal, Nukes: Click ETL)
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To: John 3_19-21
I am not a mathematician but this doesn't add up to me?

You can play around with the percentages all you want, but I once ran numbers, and I think there are some charts in the original source that back this up:

The break-even point between collecting early vs. waiting until FRA, is something like 12-14 years. You would have to collect SS starting at age 70 through age 83 (split the difference), before you break even. Obviously if you're alive at the age, you'll be making a higher cumulative income but at that age, is it that important?

17 posted on 08/02/2018 1:13:04 PM PDT by Lou L (Health "insurance" is NOT the same as health "care")
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To: Bonemaker

I was about to ask if taking it at 62 and investing it would be a better option than waiting. It seems like it would.


18 posted on 08/02/2018 1:17:42 PM PDT by FreeAtlanta (what a mess we got ourselves into)
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To: VRWCarea51

August for me. WE have enough in the pension to live off of now.

Soon as we turn 62, we’ll go for SSI. It’s all gravy at that point.

No way am I waiting for 67. I want to be young enough to enjoy the money.


19 posted on 08/02/2018 1:22:08 PM PDT by Conan the Librarian (The Best in Life is to crush my enemies, see them driven before me, and the Dewey Decimal System)
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To: Conan the Librarian

20 posted on 08/02/2018 2:00:31 PM PDT by Lizavetta
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