Retirement is a determinative chapter in our lives, and we all aspire to enjoy a comfortable and financially stable retirement. The question we all ask ourselves is how can we make sure we have the best possible retirement, with enough income to maintain our desired lifestyle. On this path to financial security during retirement, every decision counts and can make a difference in the total amount of our income in the golden years.
In this context, it is indispensable to be informed and make well-informed decisions to maximize your retirement benefits. Now, there is a trick that could prevent you from losing more than $100,000 by making a simple decision at the time of retirement. Discovering this secret can mark a significant change in your retirement strategy, giving you the opportunity to optimize your income and fully enjoy your well-deserved retirement. Read on to learn how you can ensure a more prosperous and financially healthy retirement.
The Mistake that Could Cost You Over $100,000 in Retirement Benefits
If you make one mistake, you could end up losing out on thousands of dollars in benefits. That mistake is claiming benefits too early.
The age at which you claim Social Security will have a major impact on the amount you receive each month. If you claim benefits at age 62, you will receive a reduced benefit. If you wait until your full retirement age (FRA), which is between 66 and 67, you will receive your full benefit. And, if you delay benefits beyond your FRA, you will receive an even larger benefit.
According to a study by United Income, claiming benefits at age 62 can cost you an average of $111,000 in lifetime benefits. That’s because you will receive a smaller benefit each month for a longer period of time.
Should I Wait Until My Full Retirement Age?
Based on the findings from the United Income study, approximately 57% of retirees could have increased their lifetime earnings by delaying filing until the age of 70. Conversely, 6.5% would have accrued higher benefits by filing before reaching the age of 64.
Waiting until your FRA age comes with significant benefits that can positively impact your financial situation during retirement. The FRA varies depending on your year of birth, but it usually ranges from 65 to 67 years. Choosing to wait has direct implications on the amount of your Social Security benefits.
The main advantage lies in the increase in monthly profits. For every year you wait after you reach retirement eligibility age, your Social Security benefits increase by a certain percentage. This cumulative increase can turn out to be substantial over time, offering you a more robust monthly income throughout your retirement.
In addition, waiting until the FRA can contribute to long-term financial stability. By doing so, you reduce the chance of relying on personal savings or investments to cover possible gaps in your income during retirement. Although the decision to wait may require patience, the financial benefits and the greater economic security that comes with it make waiting until the FRA a prudent strategy to optimize your Social Security benefits and enjoy a more comfortable retirement.