Getty Images, nadianb, en.elcierredigital.com Good news from Social Security across America: Your wallet will thank you
Social Security in the United States is clearer than ever: wait a few more years and you'll get your reward
The Social Security Administration (SSA) of the United States has issued an important notice for all workers. Delaying retirement can be one of the smartest financial decisions you can make. Although it is possible to start receiving benefits at 62, doing so can permanently reduce your monthly payments, and if you decide to wait, your wallet will thank you.
Pay attention if you follow Social Security: what you gain if you delay retirement
If you postpone your retirement beyond full age, your benefits will increase by 8% annually until you reach 70 years. This increase is known as "delayed retirement credits" and can mean a significant difference in your income during retirement.
For example, if your full retirement age is 67 and you decide to wait until 70, you could receive up to 24% more in your monthly payments. The full retirement age varies according to your birth year.
For those born between 1943 and 1954, it is at 66 years. This age gradually increases for those born between 1955 and 1959, and reaches 67 years for those born in 1960 or later. You can check your exact age using the SSA calculator.
Benefits of waiting a few more years to retire in the United States
Besides the 8% annual increase, delaying retirement can offer other benefits. By waiting, you not only increase the percentage of your benefits, but you can also have more years of income, which could raise the average of your 35 years of highest earnings, the basis for calculating your benefits.
With higher payments, you will have a stronger safety net to face unexpected expenses or the rising cost of living. If you are married, waiting can increase the survivor benefits that your spouse could receive in the event of your death.
The SSA offers online tools to help you determine your full retirement age and estimate your benefits. You can access these calculators on their official website.
Other details to consider: SSA is very clear about it
If you decide to retire before your full age, your benefits will be permanently reduced. For example, if your full age is 67 and you retire at 62, you could receive approximately 30% less.
If you work while receiving benefits before your full age, your payments could be reduced if you exceed certain income limits. Even if you decide to delay your Social Security benefits, it is important to enroll in Medicare at 65 to avoid penalties.
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