Social Security is the inevitable department that works as a lifeline for the senior citizens and retirees of America. And chances are, one day, you might find yourself in a similar position, depending on those monthly checks to get by. Therefore, it’s important to know how the social security benefits work so that when it’s your turn, there’s no chance of any carelessness or error.
Typically, retirees start drawing social security from the age of 62, even though it’s advised to wait till 67-70 so that maximum benefits can be claimed. Still, under the Trump administration, there have been several changes, including a delay in payments, which confused a few older adults.
As per AOL, not clearing major social security myths and reaching out for help can result in major setbacks while collecting your benefits, so we have created a list for you, which consists of the top three social security myths that need to be busted. So what are you waiting for? Scroll down and take notes.
First, most people assume they’ll be able to retire comfortably, living off Social Security alone. But without personal savings or another source of income, making ends meet in retirement could be difficult. While few people with little or no income, resources, and disability get Supplemental Security Income, it’s best for the rest not to rely solely on the benefits.
Furthermore, with the alleged speculation that the Social Security fund will shrink in the future, it’s important to make a plan before you retire. The best way to do that is by making a list of all your expenses (current and anticipated). On average, benefits will cover about 40% of your pre-retirement earnings. And while your expenses might drop slightly in retirement, a 60% reduction in income is still a lot to manage.
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Second, even though social security benefits are said to increase every year through cost-of-living adjustments (COLAs), those adjustments are tied to inflation and aren’t guaranteed. With America’s volatile economy and reports of possible fluctuation, if inflation is flat or falls, your benefits might not go up at all. Therefore, it’s best to keep SSI income handy, budget wisely, and plan your retirement.
Third, many people think that there’s nothing you can do to increase your Social Security payments. In reality, there are several ways to grow your monthly benefit. Earning more throughout your career, including freelance or side income that’s properly reported, can lead to higher payments later.
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If you delay claiming until age 70, your benefits increase by 8% for each year beyond full retirement age. Over time, that difference could total more than $100,000 in lost income, particularly if you live into your 80s or 90s. So, if your FRA is 67 and you wait until 70, your monthly benefit could increase by 24%.
Lastly, one simple strategy could even add up to $23,760 more each year! Surprised, right? It’s true! With smart planning and support from the department, one can lead a stress-free and secure post-retirement life. Do not believe rubbish myths; once you start claiming your social security benefits, there’s no looking back. You can withdraw your application within 12 months and repay any benefits you received.
Be smart and remember that where there is a will, there’s always a way to get what you want, as long as you are bold enough to plan, claim and sustain it well.
