The average Social Security benefit is larger than it's ever been, but you're not alone if you still find these checks disappointing. After all, $2,075, which is the average amount a beneficiary receives, doesn't go very far each month, especially if you live in an expensive city.
Fortunately, your benefit amount is somewhat flexible. While it's easiest to increase your benefit before you sign up, there's also a way to boost your future checks after you've already applied.
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Delaying your Social Security application can grow your checks
Your Social Security benefit is based, in part, on your full retirement age (FRA). Your birth year will determine yours, but for most workers today, FRA is 67.
Claiming before you reach your FRA will reduce your checks by up to 30%. Put another way, every month you delay benefits will increase your checks. This won't stop at your FRA. Once you've reached this age, your checks will grow by 8% per year until you qualify for your largest checks at age 70.
To put this in perspective, let's say you qualified for a $2,075 benefit at age 62 and your FRA is 67. Once you reach your FRA, you'd be eligible for a $2,964 monthly benefit. And at 70, you'd get $3,676 per month.
These increases are permanent and can result in a larger lifetime benefit. However, they also require you to go without checks for several years.
This could make sense for you if you have a steady job or substantial retirement savings to cover your costs. If you lack other income sources or have a short life expectancy, however, delaying your application may not be your best move.
Current beneficiaries can suspend benefits at their FRAs
If you're already on Social Security, you have the option to suspend benefits once you reach your FRA. This means you'll stop receiving checks until you either request that they resume or you reach age 70.
During the time you're not receiving benefits, your checks will grow by 8% per year. If your FRA is 67 and you wait until 70 to begin receiving Social Security again, your future checks will be 24% larger than they were before.
If you decide to do this, you'll have to reach out to the Social Security Administration to ask it to suspend your benefits. You'll also need to create a new retirement budget going forward. This way, you'll know how to cover your costs until your checks resume.
