The annual cost-of-living adjustment (COLA) is beneficial to millions of people. However, there is another technique to increase Social Security benefits to $461 that many Americans may be unaware of. Cost-of-living adjustments (COLAs) enhance Social Security retirement payments virtually every year, though the increase is usually not significant. The average benefit climbed by $59 per month last year, and the COLA in 2025 is expected to be much smaller. Fortunately, retirees have other alternatives for increasing their Social Security income after retirement aside from COLAs. There is one method that might enhance your monthly payout by up to $461, but there is a caveat.
What you should know about the option of increasing your Social Security payments by $461
You may have heard that the amount of Social Security checks you receive is determined by your age at the time you enroll. Your full retirement age (FRA) is when you are entitled to collect your full Social Security pension. For today’s workers, the age range is 66 to 67. However, you are not required to file a claim at that age. You can seek Social Security benefits as early as age 62, but the payouts will be less. For the first 36 months after filing your claim early, you lose 5/9 of 1% per month. If you claim early, you will lose an additional 5/12 of 1% every month. As a result, depending on your FRA, individuals who claim benefits immediately will notice a 25% to 30% reduction in monthly checks. You can also defer Social Security payments until you reach the age of 70. During this time, your checks will grow by two-thirds of one percent per month.
In general, if you cannot afford to wait or have a serious health problem, it is advisable to register your claim as soon as possible. However, delaying application results in a greater lifetime benefit for the majority of persons. Furthermore, if you later change your mind, you cannot reverse your decision to file for Social Security after you have been collecting benefits for more than a year. If you are below your FRA, you may still be able to choose to stop receiving checks once you reach your FRA. If you do this, your checks will stop coming in until you reach the age of 70, after which you can request that your benefits resume. You will earn the previously indicated delayed retirement credits during this time.
A 67-year-old with an average monthly Social Security income of $1,919 will experience a monthly rise of around $461 when they resume receiving benefits at age 70. Social Security checks totaling little more than $69,000 would have been lost during the period when benefits were withheld. However, they would continue to get $2,380 per month. Stopping benefits would still be advantageous even if the person lived to the age of 85. If they had not stopped receiving benefits, they would have received $414,504 between the ages of 67 and 85, but instead, they would have received $428,400 during the 15 years from 70 to 85.
How do you know if this option to raise your Social Security benefits is good for you?
A good life expectancy estimate can be used to decide to suspend payments, but other variables, including the most crucial, must be considered before proceeding. Many seniors wonder whether they can afford to temporarily halt their Social Security income. More than one-third of adults aged 65 and up get at least half of their retirement income from Social Security. It’s improbable that they’ll have enough money to forgo Social Security checks for a lengthy period.
However, it may not be difficult for a senior who is employed and receives Social Security benefits to discontinue this source of income. While deferring your Social Security checks for three years will maximize your benefits, the decision is not binary. You can pause your benefits for a year or even a few months if you so desire. Although the increase will not change the growth of your Social Security payments, it will be permanent and may result in a larger lifetime benefit for you.