This Social Security Misconception Could Cost You $450 a Month | Personal

If you’re claiming early under the assumption that your monthly payments will increase at your FRA, you may not collect nearly as much each month as you expect.

The average retiree collects $1,514 per month in benefits, according to the Social Security Administration. Say you have an FRA of 67 years old, and you’d receive $1,514 per month by claiming at that age. By claiming early at age 62, your benefits would be reduced by 30%, leaving you with $1,060 per month.

In other words, you may be anticipating a $450 per month boost in benefits once you turn 67 years old, but in reality, you’ll be stuck with those smaller checks for life. That could have a major impact on your retirement, especially if you’re going to be relying on Social Security for a substantial portion of your income.

If Social Security benefits are going to be a significant source of income for you in retirement, it’s a good idea to ensure you’re doing everything you can to collect as much as possible each month.

One way to increase the size of your monthly checks is to delay claiming benefits. By waiting until after your FRA to file for Social Security, you’ll receive your full benefit amount plus a bonus of up to 32% every month. Because your benefit amount is generally locked in for life once you begin claiming, when you delay benefits, you’ll receive larger checks every month for the rest of your retirement.