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Retirement can be scary, especially if you don’t have a plan. But thankfully, citizens of the US have Social Security as their safety cushion.
If you were considering applying for Social Security, 2023 is the right year! So why is this the right time, and how can you benefit from it? Read on to find out!
Understanding Social Security Requirements
Social Security is a shield that every retiree needs, and accessing it has requirements criteria.
Although the full retirement age is 66, you can apply for retirement benefits as early as 62.
If you decide to receive your benefits early, even though you receive them for a longer period, they are reduced by a small percentage each month.
High Earners Brace for Increased Social Security Payments
The new year brings good news for Social Security applicants.
The good news is that in 2023, the average retiree benefit will increase by $146 per month, a jump from $1681 in 2022 to $1827 in 2023.
But this good news comes with a price for high earners. How? For that, let’s talk about the Medicare Part B adjustments.
Premium payments for Medicare Part B will be 3% lower in 2023. That means the standard monthly premium payment will drop by $5.20 monthly.
Hence, higher-income citizens will eventually pay more than the standard monthly rate.
Rising Costs and the COLA
The biggest change 2023 brings in the Social Security benefits is that the cost of living adjustments (COLA) will increase by 8.7%. The last increase in COLA was back in 1981.
Over 65 million Social Security beneficiaries will be able to avail of this boost in January 2023.
Due to an increase in the COLA, the annual Social Security earnings for citizens below the full retirement age will increase to $21,240.
As for the citizens nearing their full retirement age, their annual earnings will increase to $56,520.
To find out how much COLA you will be getting, you can check online at the official website of Social Security.
How the Increased Full Retirement Payout Will Impact You
Although the full retirement age is 66, you can choose when to get your retirement benefits.
At the age of 66, you get eligible to receive 100% benefits. But if you want to delay, that also works in your favor!
If you wish to delay the process of your retirement benefits, then your benefits continue to increase with every month. The percentage increase depends on your retirement age and the number of months you exceed it before availing of the benefits.
This monthly increase is only valid till the age of 70. Once you have crossed 70, your benefits will stop increasing even if you wish to delay them.
The Importance of Diversifying Beyond Social Security
Social Security sounds like a secure plan, but it is recommended to diversify your options to live a carefree retirement life!
Some options you can opt for include investing, starting a savings account, timely managing your finances, and many other alternatives.
The goal is to achieve financial independence timely so you can peacefully enjoy your retirement!
So don’t let the thought of retirement scare you! Apply for Social Security today to get maximum benefits.
2023 is your year to gain financial independence, so go for it!
This article originally appeared on Financially Well Off.
