One Social Security error might result in Americans losing thousands of dollars in retirement benefits.
According to a recent study, retirees are losing thousands of dollars in pension savings because they take Social Security benefits too soon.
Retirees’ median discretionary spending
According to research supported by the Federal Reserve Bank of Atlanta, retirees can increase their median discretionary spending over a lifetime by roughly $182,370 if they wait until they are 70 to claim benefits. Currently, the complete retirement age for accessing the totality of one’s Social Security payments is 67.
However, Americans can receive some of this assistance as early as age 62, though at a significantly reduced rate. When the average worker waits until they are 70 to begin receiving Social Security, their lifetime discretionary expenditure could increase by 10%.
This equates to an additional $182,370 for the average American worker. The report’s analysts discovered that over 90% of workers aged 45 to 62 would profit from deferring Social Security payments until they reached the age of 70.
Read more: Your Social Security benefits may be reduced; Here are some things that can help you!
47 percent of households, according to the report, would have to reduce their spending
The richest 20% of US residents aged 45 to 62 might raise their lifetime discretionary expenditure by nearly $290,000 if they wait until they are 70. If they postpone claiming Social Security payments, the richest one percent of Americans may be rewarded with a lifetime spending increase of about $600,000.
Less rich Americans, those in the bottom 20% of earners, could possibly increase their lifetime discretionary spending by nearly $110,000, according to the report.
However, one issue noted in the paper is that households will likely face financial hardship if they wait longer for Social Security. According to the report, 47 percent of households would have to cut back on their spending if they did this.
One of the options was to allow people to obtain Social Security benefits sooner and another portion of their support later. It should be noted that Americans might begin receiving their full Social Security income at various ages based on their birth year.
Read more: Trump attempts to restrict rape accuser E Jean Carroll’s defamation case was dismissed