The first thing you should know is that Social Security allows workers to file for retirement benefits at 62. Some people prefer to delay it until they are 70 because that is when benefits stop growing.
The second thing to take into account is the fact that the earnings you have affect your Social Security payments. The more money you earn as a worker, and the more taxes you pay, the higher your future benefits.
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HOW MUCH DOES SOCIAL SECURITY INCREASE IF I FILE AT 70?
The Administration claims that your benefits will increase by 24%. That means that you can get about 8% extra per year after Full Retirement Age. But early retirement could reduce them.
Filing at 62 may sound perfect because you will collect more payments. What is more, you will enjoy more free time. Though Social Security stated that your benefits could be reduced by 30%.
Therefore, it is of vital importance that you take note of all the monthly expenses you may have. Do not forget about medical expenses and unexpected purchases.
SOCIAL SECURITY SUGGESTS GETTING AN ESTIMATE
All you will need is to have a Social Security account. By doing so, you will be able to see all the possible amounts at different ages. A Statement is another great way to see it.
If you are close to retirement, the Administration will send it to you by mail. Paying for healthcare is another thing you must take into consideration. For example, the cost of Medicare Part B will be taken from your monthly benefit.
This will reduce your payment. So, that could be a problem if you live on a shoestring budget. Those seniors who have other earnings apart from Social Security should be careful with tax withholding.
Some seniors may have to pay federal income tax. Those retirees who continue working at the same time may also get a reduction if they exceed the threshold. But to get more money, work for 35 years, earn the taxable maximum, and file at 70.