Despite the fact that many Americans believe that it is important to save money for retirement not everyone does it. Social Security payments are just a supplement to your nest egg.
What is more, the Social Security funds may not have enough money to pay benefits in just 10 years’ time. So, ensuring that your payment is as large as possible can be a win-win situation for retirees and the USA in general.
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Before becoming a retiree you should calculate the total amount of your payment. In this way, you will see the money you will have to face all the expenses. Besides, inflation is something you cannot forget about because it can also reduce your monthly budget.
Social Security reduces your check at age 62
The fact that you can get about 30% less every month is something to be worried about. While some people believe they will get more checks in their lives, others see that it could be a way to say goodbye to lots of dollars.
In order to work out your Social Security benefits reduction, you must use the figures SSA has. For example, a retirement benefit can get a reduction of 5/9 of one percent for every single month before Full Retirement Age.
This is only when it is just up to 36 months before the normal retirement age. If it is over 36 months, your benefits will be reduced 5/12 of one percent per month.
Social Security claims that if the number of reduction months is sixty, you will receive a 30% reduction. That happens when you start retirement at 62 and your Full Retirement Age is 67.
Do I need to calculate my retirement benefits reduction?
Luckily, you have kept reading all the way because it is not necessary to do the maths. All you need is to download your Social Security statement. There, you will be able to find the approximate amount of your retirement check at different ages.
By doing so, you just need to compare and see what suits you best. If you would like to have a larger check in retirement, there are three things you must do before you retire.
Firs of all, you must work for at least 35 years. Those workers who do not achieve this will also get another reduction. Even if you qualify for Social Security by working for just ten years, you should work for a minimum of 35. SSA uses the top earnings in 35 years of work. Delay retirement until you are 70.
Then, you will be able to get 24% extra per month. Those whose earnings are low will get a low payment too. The goal you must have is the taxable maximum for every year, $160,200 in 2023 or 168,600 in 2024. All these tips can help you get up to $4,555.