Current:Home > MarketsYou may be missing out on Social Security benefits. What to know.-Angel Dreamer Wealth Society D1 Reviews & Insights
You may be missing out on Social Security benefits. What to know.
View Date:2024-12-23 18:48:43
Social Security benefits can go a long way in retirement, especially if your savings are falling short.
As of 2021, the median retirement account balance among workers was just $35,345, according to Vanguard's most recent How America Saves report. For many older adults, then, outside sources of income like Social Security are critical.
However, there's a chance you may not receive as much as you think in benefits. While major factors like taxes and claiming too early can reduce your monthly payments, there are two other sneaky ways you may be missing out on your hard-earned benefits.
1. Not knowing your full retirement age
Your full retirement age (FRA) is the age at which you'll receive the full benefit amount you're entitled to based on your work history. Your exact FRA will depend on your birth year, but it's age 67 for anyone born in 1960 or later.
Want to retire with the max benefits?Here's the salary you need to get the most Social Security
Know before you work:Earning a paycheck could stop your Social Security benefits. But that could be a good thing.
How much you'll actually receive from Social Security each month depends on when you begin claiming. If you file as early as possible at age 62, you'll receive as little as 70% of your full benefit amount. By waiting until age 70, you'll receive 100% of your benefit plus at least 24% extra each month.
However, only 13% of U.S. adults can correctly name their FRA based on their birth year, according to a 2022 report from the Nationwide Retirement Institute, and the average baby boomer guessed that their FRA was 63 years old.
While this may seem like an innocent mistake, if you don't know your correct FRA, you risk inadvertently claiming benefits too early.
For example, say you believe your FRA is 63 years old when it's actually age 67. If you file at 63, you may expect to receive your full benefit amount when in reality, you're claiming four years early -- which would permanently reduce your benefits by a whopping 25% per month.
2. Not taking advantage of all Social Security benefits you're entitled to
Retirement benefits are the most popular type of Social Security, and most workers are entitled to these payments after working and paying taxes for at least 10 years. But they're not the only benefits you might qualify for in retirement.
If you're married, divorced, or widowed, you could be eligible to receive spousal, divorce, or survivors benefits, respectively.
- Spousal benefits: You may qualify for spousal benefits if you're currently married to someone who is entitled to either retirement or disability Social Security benefits.
- Divorce benefits: If you're divorced and your previous marriage lasted for at least 10 years, you might be entitled to divorce benefits. You cannot currently be married to qualify for these benefits, but if your ex-spouse has remarried, it won't affect your ability to claim divorce benefits on their record.
- Survivors benefits: If you were financially dependent on a loved one who passed away, you could collect survivors benefits based on their work record. These are generally reserved for widows and widowers, but they're also sometimes available for divorced spouses, parents, children, and other family members.
For both spousal and divorce benefits, the maximum you can receive is 50% of the amount your spouse or ex-spouse is entitled to collect at their FRA. If you're already receiving more than that amount based on your own work record, you won't qualify for spousal or divorce benefits.
Survivors benefits are a bit trickier, as your benefit amount will depend on your age, your relation to the deceased, and how many other family members are claiming benefits. But if you're widowed, you could collect the deceased person's entire benefit amount in survivors benefits.
Social Security benefits can potentially make or break retirement for many seniors, so it's wise to ensure you're collecting as much as possible. By knowing your FRA (and how your claiming strategy will affect your benefit amount) as well as what types of benefits you qualify for, you can maximize your monthly payments.
The Motley Fool has a disclosure policy.
The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY.
Offer from the Motley Fool:The $21,756 Social Security bonus most retirees completely overlook If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $21,756 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.
veryGood! (15135)
Related
- Maine dams face an uncertain future
- A Florida man set to be executed this week appeals to the US Supreme Court for a stay
- Baltimore man accused of killing tech CEO pleads guilty to attempted murder in separate case
- Woman struck by boat propeller at New Jersey shore dies of injuries
- 'Squid Game' creator lost '8 or 9' teeth making Season 1, explains Season 2 twist
- Don't get tricked: How to check if your Social Security number was part of data breach
- 'We dodged a bullet': Jim Harbaugh shares more details about Chargers elevator rescue
- How cozy fantasy books took off by offering high stakes with a happy ending
- Here's Your First Look at The White Lotus Season 3 With Blackpink’s Lisa and More Stars
- Timeline of Gateway Church exodus, allegations following claims against Robert Morris
Ranking
- Miami Marlins hiring Los Angeles Dodgers first base coach Clayton McCullough as manager
- These Wizard of Oz Secrets Will Make You Feel Right at Home
- Babe Ruth’s ‘called shot’ jersey sells at auction for over $24 million
- Double Duty: For Danny Jansen, playing for both teams in same game is chance at baseball history
- Sean Diddy Combs' Lawyers File New Motion for Bail, Claiming Evidence Depicts a Consensual Relationship
- NASCAR driver Josh Berry OK after scary, upside down collision with wall during Daytona race
- America's newest monuments unveil a different look at the nation's past
- Walz’s exit from Minnesota National Guard left openings for critics to pounce on his military record
Recommendation
-
Patricia Heaton criticizes media, 'extremists' she says 'fear-mongered' in 2024 election
-
The Sweet Detail Justin Bieber Chose for Baby Jack's Debut With Hailey Bieber
-
Horoscopes Today, August 24, 2024
-
Bachelor Nation's Kaitlyn Bristowe Alludes to Tension With Tayshia Adams Over Zac Clark
-
Artem Chigvintsev Returns to Dancing With the Stars Ballroom Amid Nikki Garcia Divorce
-
US national parks are receiving record-high gift of $100M
-
NCAA issues Notice of Allegations to Michigan for sign-stealing scandal
-
Polaris Dawn civilian crew prepares to head to orbit on SpaceX craft: How to watch