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Myth #: You Can Claim Early Then Get A Bump Up Once You Reach Full Retirement Age

Cost of living outpacing social security benefits

Many believe there is a “bump up” or “added income” once they reach their FRA. They’ve heard they can claim early at 62, then when they reach 66 or older, their checks will increase to the amount that corresponds to their FRA benefit. That’s a big misperception.

There’s no bumping up of income once you’ve claimed your Social Security retirement benefit. However, anyone receiving a benefit can voluntarily “suspend” that benefit after they reach FRA and resume it as late as age 70. If they do, the annual benefit will increase by 8% per year of delay up until age 70. After that, you get an annual cost of living adjustment, but no increase in your base benefit, which will start automatically the month you reach age 70 unless you specify otherwise.

Read Viewpoints on Fidelity.com: Social Security do-over: Claim, suspend, and restart

In general, you can cancel your Social Security claim if you do so within the first 12 months of receiving benefits.2 You must repay the full amount you’ve received, and the full amount a current spouse or family member received based on your benefit. Then, you’re eligible to claim again at a later date and will receive a larger monthly payment. Each individual can only cancel a claim once in their lifetime.

Myth #: You Must Claim Your Social Security Benefit At Age 62

Some people think you have to start claiming your Social Security benefits at age 62. That’s a myth: 62 is the earliest age you can claim your benefit, but it’s not the only age to do so.

Your base benefit is calculated according to your “full retirement age,” or FRA, and your FRA is determined by your date of birth. The Social Security Administration calculates your base Social Security benefit based on your average indexed monthly earnings during the 35 years in which you earned the most .

Tip: You’ll find your FRA at Social Security’s website, SSA.gov, or on a paper statement mailed to you by the SSA. If you were born in 1960 or later, your FRA is 67.

If you claim Social Security benefits any time before your FRA, you lock in a permanent reduction in monthly income. Claiming at 62 translates to a reduced monthly income of 30%, relative to your FRA monthly benefit . That means you may receive a lot less monthly retirement income, every year, for potentially several decades. A key consideration for when you claim Social Security benefits is maximizing your income for a retirement that could last longer than 30 years.

Wait until age 70 and lock in a “bonus”:

  • Waiting to claim Social Security after age 62 comes with a bonus: roughly 8% additional monthly income per year for each year you delay claiming .
  • If your FRA is 67, your monthly income would increase 24% by waiting from 67 to 70.
  • If your FRA is 67, your monthly income would increase around 77% by waiting from 62 to 70.

These States Offer Retired Worker Payouts Above The National Average

Recently, the Social Security Administration released data from 2018 that highlighted what each state received in aggregate Social Security retirement benefit outlays, as well as how many recipients received those benefits. In other words, it allowed for the determination of what the average retired worker received each month from Social Security in each state.

As of September 2019, the average Social Security retirement benefit was $1,474.77, but according to the SSA, it should reach $1,479 a month prior to the 1.6% cost-of-living adjustment being passed along come January. Following calculations for each state, just 21 states offer an average monthly payout that’s above the SSA-estimated end-of-year average of $1,479 a month. In descending order, these states are:

  • New Jersey: $1,616.80
  • Wyoming: $1,485.18
  • Vermont: $1,481.62
  • Remember, these are averages from the end of 2018, so they don’t factor in the 2% COLA that was passed along in 2019, nor do they account for the 1.6% COLA headed beneficiaries’ way in 2020.

    Image source: Getty Images.

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    Am I Eligible For Medicare And What Services Am I Able To Receive

    In order to be eligible for Medicare there are a few qualifications that need to be met.

    There are two plans for Medicare: Medigap and Medicare Advantage.

    Medigap is also known as Medicare Supplement and can be obtained by those receiving Original Medicare.

    It will cover the gap between the original coverage and what you owe.

    These plans are run by private insurance companies so their availability depends on your location.

    Medicare Advantage will take the place of Original Medicare and offers many different plans.

    Plans are Health Maintenance Organization Plans, Preferred Provider Organization Plans, Private Fee-for-Service Plans, and Special Needs Plans.

    The Advantage Plans are offered by private insurance companies as well, so they also vary by location.

    What Is A Social Security Card

    Retiring Guy

    Your Social Security card is an important piece of identification. You’ll need one to get a job, collect Social Security, or receive other government benefits.

    When you apply for a Social Security number , the Social Security Administration will assign you a nine-digit number. This is the same number that is printed on the Social Security card that SSA will issue you. If you change your name, you will need to get a corrected card.

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    Oasdi Beneficiaries By State And Zip Code 2011

    This annual publication focuses on the Social Security beneficiary population at the ZIP Code level. It presents basic program data on the number and type of beneficiaries and the amount of benefits paid in each state, Social Security Administration field office, and ZIP Code. It also shows the number of beneficiaries aged 65 or older.

    The data are derived from the Master Beneficiary Record, the principal administrative file of Social Security beneficiaries. The Social Security Detailed Office Organization Resource System file was used to associate the field office data with the ZIP Codes. Data for field offices in each state include only beneficiaries in that state. However, some Social Security field offices serve residents of more than one state. To obtain field office totals in these situations, it is necessary to combine data for each state served by the field office. The data include only persons whose benefits are currently payable. Those whose benefits were withheld are excluded.

    To avoid disclosing the reason for Social Security eligibility of small groups and the amounts of benefits received, a controlled rounding procedure was used for field office and ZIP Code data. Data are not shown for ZIP Codes with fewer than 15 beneficiaries.

    Under the controlled rounding procedure, ZIP Code data on the number of beneficiaries shown in the table are changed according to the following formula:

  • If the number is divisible by 5 , then the numbers are not changed.
  • How To Supplement Your Social Security Income

    The Motley Fool and other financial news sites do provide some good information for their readers. These squeeze page advertisements just sully their reputations with many small investors. Another topic they promote, though not as aggressively, is how to supplement your Social Security income. Again, it almost sounds like there is a secret government program most people dont know about. Unfortunately, its just the same routine, mundane advice we all get from every corner of the universe.

    The simplest way to increase your income is to invest some money in dividend-paying stocks. Dont worry about the prices of the shares because you dont want to sell them. You want to receive quarterly dividends. The companies most likely to continue paying regular dividends are known as Dividend Aristocrats. They have an established history of paying a dividend for at least 25 consecutive years. These are solid, stable companies. Many dividend-paying companies offer Divendend ReInvestment Plans . Theyll automatically reinvest the dividends for you until you tell them to stop.

    Another way to invest in dividend income is to buy shares in a mutual fund that specializes in dividend income. These mutual funds reinvest your dividends for you and they manage the portfolio to ensure risky stocks dont cost you money.

    Other ways to supplement your income include:

    How does Robinhood make money? Three ways:

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    Can I Check My Ssn Status Online

    My account with the Social Security Administration. Scroll down to the Your Benefit Applications section on the My Home page and under the More Info header. In the Current Status area, you may check the status of your application. Today is the best time to check the progress of your Social Security application online!

    Whos Eligible For A Medicate Advantage Plan With A Part B Giveback Benefit

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    To be eligible, you must:

    • Be enrolled Original Medicare
    • Pay your own Part B premium

    You are not eligible if you receive Medicaid or any government assistance that helps you pay your Part B premium. Also, the Part B Giveback is restricted to certain states and counties. Plans may not be available in your area.

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    Health Insurance And Drug Cost Help

    Pricey health insurance and prescription costs can take a big bite out of retirees’ incomes.

    Some may be eligible for assistance with their monthly premiums under the Medicare Savings Program, said Caitlin Donovan, a spokeswoman for the National Patient Advocate Foundation, a nonprofit that helps patients access and pay for health care.

    “If you qualify, your premiums, deductibles and copays will be covered, which would be an enormous financial relief for anyone,” Donovan said.

    Does My Zip Code Affect My Medicare Coverage

    The Centers for Medicare & Medicaid Services reports that, with Original Medicare , you can use any doctor or hospital that takes Medicare, anywhere in the U.S. Medicare plans like Medigap and Medicare Advantage are a different story, though. The pricing, rules, and availability of these plans vary by state, and even sometimes by zip code. Here, we cover what you need to know about Medicare coverage based on where you live, using the official U.S. government website for Medicare as a guide.

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    Medicare Benefits: How Does Your Zip Code Affect Your Ss Benefits

    Everything you need to know

    It might come as a surprise to you, but the Medicare benefits you receive can vary depending on the state in which you live.

    The pricing, rules and availability of the plans for Medicare and Medicaid Services can vary by state, and sometimes even by zip code.

    Here, we will explain how the prices can vary.

    Next Steps To Consider

    The Pulse: Do you think the Social Security system will be able to pay ...

    This information is intended to be educational and is not tailored to the investment needs of any specific investor.

    Fidelity does not provide legal or tax advice. The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact investment results. Fidelity cannot guarantee that the information herein is accurate, complete, or timely. Fidelity makes no warranties with regard to such information or results obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Consult an attorney or tax professional regarding your specific situation.

    Investing involves risk, including risk of loss.

    Past performance is no guarantee of future results.

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    How Do I Change My Address With Social Security

    Similarly, How do I notify Social Security of a change of address?

    How can I alter my mailing address? Monday through Friday, 8:00 a.m. to 7:00 p.m., call 1-800-772-1213 or. Please contact the Social Security Administration in your area.

    Also, it is asked, How do I change my Social Security address online?

    You may register a change of address online using your My Social Security account if you are receiving Social Security payments or are enrolled in Medicare. After logging in, go to My Profile on the right side of the page, pick Update Contact Information, and input your new address.

    Secondly, Do you have to inform Social Security when you move?

    If you receive Social Security benefits, you have a legal duty to report any changes that may impact your disability, retirement, or Supplemental Security Income status.

    Also, Does IRS notify Social Security of address change?

    IRS Form 8822 Change of Address You must also tell the Internal Revenue Service when you relocate . The Internal Revenue Service is the federal agency in charge of tax collection. Notifying Social Security or Medicare of a change of address is not the same as filling out this form.

    People also ask, How do I change my mailing address?

    Related Questions and Answers

    How To Appeal A Part B Premium Income Adjustment

    You may request an appeal if you disagree with a decision regarding your income-related monthly adjustment amount. Complete a Request for Reconsideration or contact your local Social Security office to file an appeal.

    You may be able to skip the formal appeal and simply provide documentation if your income changed due to any of the following:

    • You married, divorced or became widowed.
    • You or your spouse stopped working or reduced your work hours.
    • You or your spouse lost income-producing property due to a disaster or other event beyond your control.
    • You or your spouse experienced a scheduled cessation, termination or reorganization of an employers pension plan.
    • You or your spouse received a settlement from an employer or former employer because of the employers closure, bankruptcy or reorganization.

    These methods apply to the Part B premium. Contact the IRS if you disagree with your adjusted gross income amount, which is provided to Medicare by the IRS.

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    Who Is Eligible For The Medicare Part B Give Back Benefit

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    It is pretty easy to qualify for the Medicare Give Back benefit as the eligibility criteria are straightforward. First, you must be enrolled in Original Medicare. You need to have both Medicare Part A and Medicare Part B coverage. Next, you must pay your own monthly Part B premium. If you receive financial assistance through Medicaid services or some other program that pays your Part B premium, then you cannot qualify for the Give Back benefit. Some state and local programs exist that help pay Part B premiums for participants, but these programs will disqualify you from the Give Back program.

    Finally, you should live in a service area that is eligible for the Give Back program. Since this program is administered by the private insurance carriers who manage Medicare Advantage plans, it is only available in certain areas. There are currently 48 states in America that have access to a Give Back benefit, so you can likely find one in your area. The easiest way to determine that is by checking your ZIP code and searching for available Medicare Advantage plans in your area.

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    What Is The Medicare Part B Giveback Benefit

    The Medicare Giveback Benefit is a Part B premium reduction offered by some Medicare Part C plans.

    If you enroll in a Medicare Advantage plan with this benefit, the plan carrier will pay some or all of your Part B monthly premium. The amount covered can range from 10 cents to the full Part B premium cost .

    Typical Services Not Covered By Medicare

    • Long-term custodial care
    • Private hospital room , telephone and television
    • Private duty nursing
    • First three pints of blood if you cannot replace them in some manner
    • Routine physical exams including most presurgical exams and tests
    • Dental care and dentures
    • Routine hearing exams and hearing aids
    • Routine eye exams and eyeglasses, except cataract lenses
    • Eye refractions
    • All over-the-counter drugs
    • Routine podiatry care
    • Inpatient psychiatric care after 190 days
    • Acupuncture and most chiropractic services
    • Cosmetic surgery, unless caused by accidental injury or to improve the function of a malformed body part
    • Full-time home care, homemaker services, home-delivered meals
    • Christian Science practitioners and naturopath’s services
    • Orthopedic shoes, unless part of a leg brace and included in orthopedist’s charges
    • Ambulance service from home to doctor’s office
    • Services provided outside the United States

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