In 2025, the Social Security Administration (SSA) will issue a 2.5% Cost-of-Living Adjustment (COLA), thus increasing the checks received monthly by retirees. This will raise the maximum monthly check for those retiring at 70 to $5,108 from the $4,873 received in 2024. In their quest for increasing Social Security benefits and maximizing their entitlements, interested parties should put the following suggestions into place.
Delay Benefit Claims Until Age 70
Increasing monthly payments significantly by any sort of delay ever since one’s Full Retirement Age (FRA) can be a great opportunity. Each year up to age 70 is an additional DELAYED RETIREMENT CREDIT to your already entitled amount. Let us illustrate this: Say, if you were given an age for FRA of 67 and waited until 70, then your monthly benefit must have gone significantly high.
Maximize Your Earnings During Your Working Years
The calculation for Social Security benefits is based on your highest 35 years of earnings. To maximize your benefit potential, you need to at least have earned the maximum taxable earnings limit for 35 years. In the year 2025, the maximum taxable earnings limit stands at $176,100.
Any increase in taxable income through overtime hours, promotions, and moves to higher-paying jobs will also serve to maximize benefits. Lengthening your work life can also eliminate the lower-earning years from your average, thus increasing your monthly payments.
Understanding the Consequences of Early Retirement
The earlier you claim Social Security benefits before your FRA, the more your payments are reduced; claiming at age 62 could mean a reduction that could be as much as 30 percent. On the other hand, delaying benefits would increase monthly payments as discussed earlier.
Be aware of changes to legislation affecting Social Security benefits.
In 2023, many retirees had their benefits favorably impacted by legislation changing a provision controversially known as WEP and GPO under the Social Security Fairness Act. This allows many public sector retirees to receive larger Social Security payments.
COLOA does keep the purchasing power of Social Security benefits alive. However, one should also consider other retirement savings options that would ensure the financial independence of the persons in consideration.
Conclusion
Social Security benefits can be maximized through serious planning: delaying benefits whenever possible, maximizing lifetime earnings, and staying informed about changes in policies. Using these techniques will help you on the way toward the highest possible monthly benefit, with an undoubted benefit to financial stability in retirement.