Nearly Half of Americans Are Being Duped by the Social Security System


Social Security can be a complicated subject, but understanding the fundamentals of how the program works can help you maximize your monthly payments. While you don’t need to know everything about the program, there is one crucial aspect that nearly half of Americans overlook – and it could result in a lower-than-expected benefit amount.




What effect will your age have on your benefits?

The age at which you file for Social Security has a significant impact on the amount you receive. To receive the full amount based on your work record, you must wait until you reach your full retirement age (FRA), which is either 66, 67, or somewhere in between, depending on the year you were born. You can apply for benefits as early as age 62, but you will receive smaller monthly payments.

However, many Americans fall into the trap of not realizing that this benefit reduction is permanent. According to a 2021 Nationwide Retirement Institute survey, approximately 45 percent of people incorrectly believe that if they file early, their benefits will increase once they reach their FRA.

In reality, if you file for Social Security early, your lower payments are usually guaranteed for life. In other words, even after you reach FRA, you will continue to receive reduced monthly checks.


Should You file?

As a result, it’s especially important to make the right decision when deciding when to file for benefits.

Claiming Social Security early may be the best option for some people, but keep in mind that the benefit reduction is permanent. If you file with the expectation that your payments will be increased later, it could jeopardize your retirement.

When it comes to claiming, there is no right or wrong answer. In general, however, if your savings are running low and you want to earn as much money as possible each month, delaying Social Security may be the best option. Waiting until the age of 70 to file may result in hundreds of dollars more per month, which can go a long way in retirement.

On the other hand, claiming Social Security sooner may be a wise move if you have a healthy nest egg and are willing to forego some monthly income in exchange for the opportunity to retire earlier. Similarly, if you have reason to believe you will not live a longer-than-average life, filing your claim early may give you more time to maximize your benefits.


Getting the Most Out of Your Social Security Benefits

Before you decide when to file, it’s a good idea to run the numbers to see how much you’d be gaining or losing each month.

You can check your statements online by creating a mySocialSecurity account if you haven’t already. This will give you an estimate of your benefit amount based on your actual earnings, and it will also be the amount you will receive if you file with your FRA.

If you claim at the age of 62, your benefit amount will be reduced by up to 30% if you have a FRA of 67. If you wait until the age of 70, you may be able to receive your full benefit amount plus up to 24 percent more each month (again, assuming your FRA is 67).


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It’s easier to decide when to file a claim once you understand how your age affects your benefit amount. And the more careful you are in making your decision, the better off you will be in retirement.

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