Social Security: How Delaying Your Claim Can Result in Higher Monthly Payments

by Michael Freeman

Americans planning their retirement should naturally look at several options before coming to a decision. On that note, delaying your claim could result in higher monthly payments.

The Sun often discusses certain tactics for maximizing payments for things like Social Security, and delaying your claim is one of them. You may not know this, but waiting to obtain your first monthly check actually boosts the income each subsequent payment provides. This increases the benefits your surviving widow may be entitled to. Additionally, this gives you a better chance of getting more lifetime benefits.

That being said, it’s not always the best choice to do so. To see if it’s your best option, you should look at several factors.

One of these is calculating your potential monthly benefits at a young claiming age. The wages you receive through your career, as well as your age, determine monthly benefits. Claiming benefits at full retirement age (FRA) allows you to obtain your primary insurance amount. Claiming before that reduces benefits by five-ninths of one percent for the first 36 months and five-twelfths of one percent for each prior month. However, claiming after FRA increases your benefits by two-thirds of one percent each month until you’re 70 years old.

Now that you know this, the next step is deciding how long you plan to wait to collect your payments. After that, you can calculate how much higher your monthly checks will be when you do begin claiming your benefits. After all that, you can figure out how many months of higher checks you’ll need to make up for missed income.

While making these preparations, it is crucial to consider your health status. As morbid as it may sound, living long enough to reap the benefits is essential to this paying off.

What Kind of Salary Does One Need to Maximize Benefits for Social Security?

As stated, a vital part of the Social Security equation is how much money you make. So, what does your salary need to look like to claim the maximum benefit when you retire?

We know the two main factors in calculating benefits are how many years you worked and your lifetime earnings. The Social Security Administration (SSA) calculates your benefits by taking your average annual salary over the 35 highest-earning years of your career, The Sun reports. This means you’ll have to have worked at least 35 years during your life. If you didn’t, your average will be significantly less.

Taking all of this into consideration, the SSA’s maximum benefit level according to their taxable earnings is $147,000. This means if you average $147,000 or more over 35 years, you’ll obtain as much as you can.

It should be noted you can boost your benefit with multiple jobs, it doesn’t have to be a singular one where you earn $147,000 or more.