Have you heard about the $16,728 annual Social Security bonus? There is really no bonus that retirees can receive. The Social Security Administration (SSA) uses a specific formula based on your lifetime earnings to determine your benefit amount.
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However, there are ways to create your own bonus by maximizing the amount you are entitled to. Here are some ways to do this:
Increase your income
Social Security benefits are calculated based on the 35 years you earn the most. If you have years of low or no income, this is also taken into account in your calculation and reduces your eligible amount.
According to the SSA, each year of work will replace one year of no or low earnings when calculating your Social Security benefits. This can help increase your benefit amount. There is, however, a maximum amount of earnings used to calculate your retirement benefits. Earnings of up to $160,200 in 2023 are used to calculate your payments, but this amount is adjusted for inflation each year.
Wait until age 70 to recover
Waiting to collect Social Security benefits until age 70 ensures you receive the maximum amount of your benefits.
Only 10% of workers wait until then, but researchers found that filing a claim before age 70 results in an estimated median loss of $182,370 in discretionary spending over the lifetime of claimants ages 45 to 62. , CNBC reported. Retirement benefits at age 70 are 76% higher than benefits received at age 62, adjusted for inflation.
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Applying for spousal benefits at full retirement age
Married couples should be strategic when applying for spousal benefits. Unlike personal benefits, spousal benefits do not increase if you delay payments beyond full retirement age. FRA varies by year of birth, but is generally age 66 or 67. The SSA states that the spouse’s benefit amount can be based on the spouse’s own income or up to half of the higher-income benefit, whichever is greater.
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This article originally appeared on GOBankingRates.com: Social Security: Is the $16,728 Annual Bonus Real?
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