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Many Americans claim Social Security retirement benefits at the earliest age possible but see their monthly benefit checks reduced for life for doing so.
Now, a bipartisan group of senators is proposing two changes to help encourage retirees to wait. The lawmakers include Sens. Bill Cassidy, R-La.; Chris Coons, D-Del.; Susan Collins, R-Maine; and Tim Kaine, D-Va.
The proposed updates aiming to encourage more Americans to delay tapping Social Security benefits include changing the language the Social Security Administration uses around the claiming process and increasing the mailing of paper Social Security statements.
The earliest age to claim Social Security retirement benefits is 62. However, those who claim at that age see a reduced benefit.
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“When to claim Social Security benefits is a critical decision for older Americans planning their retirement,” the senators stated in a letter to the Social Security Administration.
“Most people, however, do not claim benefits at the age that would maximize their income in retirement, usually because they claim too early,” they wrote.
Social Security beneficiaries are entitled to full benefits once they reach their full retirement age – 66 to 67, depending on their date of birth. For every year delayed past full retirement age, claimants stand to get an 8% increase.
Yet age 62 remains the most frequent claiming age for almost 35% of men and 40% of women, the senators note in their letter, resulting in an average lifetime loss of $111,000 per household.
There are various reasons why retirees claim at the earliest possible age, the senators note, including an inability to work, financial shocks, liquidity constraints, life expectancy or the desire to pass money on to heirs.
However, some people may start…
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