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This move could add another $70,000 to your lifetime Social Security benefit

When it comes to Social Security, most people focus on the amount of their monthly checks, but that’s only part of the story. If you want the most money possible, you need to maximize your lifetime benefit, which means taking into consideration how long you will receive those checks. Here’s a simple trick you can use to add over $70,000 to your lifetime Social Security benefits.

How the government calculates your Social Security benefit

First, it’s important to understand how the government calculates your Social Security benefit. Basically, it keeps track of the income on which you paid social security contributions each year of your working life. When you apply for Social Security, it totals your earnings for the 35 highest-earning years, adjusted for inflation. Then it uses a formula based on your year of birth to determine your Primary Insurance Amount (PIA).

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But if you want to claim this amount every month, you have to wait to register until the Full Retirement Age (FRA). It’s between 66 and 67 for today’s workers.

Signing up before that cuts your checks. You will only get 70% of your PIA by check if you enroll immediately at age 62 and your FRA is 67. Those with an FRA of 66 get 75% of their PIA by check by signing up at age 62.

Each month you delay increases your checks slightly until you reach your maximum benefit at 70. This is 124% of your PIA per month if your FRA is 67 or 132% if your FRA is 66.

Now that we understand that, we can talk about how to maximize your lifelong Social Security benefits.

How to add more than $70,000 to your Social Security lifetime benefit

The average Social Security benefit is currently about $1,661 per month. If you applied for this benefit from age 62 and lived to age 85, you will receive approximately $458,436 in total from the program. That’s quite a large sum, but remember that starting early lowers your checks.

If you had delayed Social Security until you qualified for your maximum benefit at age 70, assuming an FRA of 67, you would get $2,943 per month. Although you would receive checks for eight years less, you would still end up with a lifetime benefit of $529,740 if you lived to age 85. That’s $71,304 more than you would have gotten if you had signed up for benefits at age 62.

But all of this is based on a reasonably long life expectancy. If you had only lived to be 75, you would get more Social Security money by enrolling earlier. So don’t make the mistake of assuming that delaying benefits is always the smartest decision.

How to Decide When to Register for Social Security

If you’re trying to maximize your lifetime benefits, you need to think about your life expectancy. It’s best to assume that you’ll live to at least your early to mid-80s, unless you have a good reason to think you won’t be that long. You can use your family’s medical history to help inform your decision, but don’t forget to adjust your estimate based on your personal medical condition as well.

Once you have an idea of ​​your lifespan, you should create a my social security account. Here, you’ll find a calculator that can tell you how much you’ll receive from Social Security at different starting ages based on your work history. You can use it to help estimate your lifetime benefit.

First, take your monthly benefit for a given age — $1,661 per month at age 62 in our example above — and multiply it by 12 to get your estimated annual benefit. In our case, it’s $19,932 per year. Now multiply that by the number of years you plan to claim benefits. In our example, we assumed a life expectancy of 85 years, which would mean 23 years of benefits. So $19,932 multiplied by 23 years equals a lifetime benefit of $458,436.

Do this for a few different ages until you find the one that will earn you the most money overall. Try to delay benefits until this age if possible.

You may need to repeat this process periodically, as your income – and therefore your Social Security benefit – will change over time. Your retirement goals and schedule may also change. Starting those numbers again won’t take you long, and it helps you not miss an easy opportunity to increase your Social Security benefits.