Maximizing Your Social Security Is More Important Now Than Ever
Though many people are fearful about the future of Social Security, the reality is that current and soon-to-be retirees will be able to rely on the program for the foreseeable future. Given the current inflationary environment we face -- alongside several other headwinds, like rising interest rates -- getting the most out of Social Security should be seen as an imperative for those currently in and approaching retirement.
In most years, the government gives every Social Security recipient's payments a bump via a cost of living adjustment (COLA) based on the prior year's inflation. For 2022, the COLA was 5.9%, and the expectation is that 2023's will be a fair amount higher.
COLAs are separate from your increased base benefit if you delay filing beyond what the government designates as your full retirement age (FRA). People who file at their full retirement age (now 67 for those born after 1960) will collect 100% of the benefit they are due based on the amount they've paid in Social Security taxes over the course of their career. For every month you delay filing for benefits beyond that age (up to age 70), you'll receive incrementally larger base benefits that amount to 8% a year. For every month earlier than your full retirement age that you file, your base benefit gets reduced by a fraction of a percent. Those fractions add up. If you file immediately after you turn 62 (with an FRA of 67), your actual monthly benefit will be 30% less than your "full" benefit.
Source Fool.com
