Tampa, Florida – Social Security beneficiaries are set to receive a significant increase in their payments next year, with the cost-of-living adjustment (COLA) expected to be the largest in recent years. In the past decade, COLA increases have ranged from as low as 0.0% in January 2016 to as high as 8.7% in January 2023. This upcoming increase of 8.7% in January 2023 is the largest in ten years, providing relief to retirees and beneficiaries who have faced rising costs of living.
Living off of Social Security after retirement can be challenging, but there are several tips and strategies that individuals can utilize to make it more manageable. These include delaying taking Social Security benefits, planning out survivor benefits, moving to an area with a lower cost of living, paying off debt before retiring, and considering a tax-friendly state for relocation. Additionally, taking advantage of free entertainment, senior discounts, and other benefits can help stretch Social Security payments further.
For those who are divorced, there are also considerations to be made regarding spousal benefits. If the ex-spouse was born before January 2, 1954 and has reached full retirement age, they can choose to receive only the divorced spouse’s benefits, delaying their retirement benefit until a later time. However, if the ex-spouse’s birthday is January 2, 1954, or later, the option to take only one benefit at full retirement age expires.
When it comes to claiming an ex-spouse’s benefits, it’s important to note that the maximum spousal benefit is 50% of whatever the ex-spouse will collect at their full retirement age. Ex-spouses can receive benefits on their former partner’s record if the marriage lasted 10 years or longer, the ex-spouse is unmarried, they are 62 or older, their own entitlement is less than what they would receive based on their former partner’s work, and the former partner is entitled to Social Security retirement or disability benefits.
For survivor’s benefits, individuals do not have to claim their spouse’s benefits immediately after they pass away. They can delay the claim until reaching their full retirement age. The amount of survivor benefits one can receive is determined by the difference between their own Social Security payment and the maximum benefit their deceased spouse received.
As the cost of living increases and retirees face the challenge of stretching their Social Security benefits, understanding the various options available for maximizing these benefits becomes crucial for financial security in retirement. By carefully considering the different strategies and benefits available, retirees can navigate the challenges of living off of Social Security and enjoy a more stable financial future.