More and more Americans rely on Social Security benefits. Even if retirement checks were meant to be a supplement, it is becoming an essential part of the income of millions of seniors in the United States. However, some people do not know how these benefits work.
The first thing that you should know is the fact that Social Security retirement benefits are not for everyone. That means you will only receive them if you qualify. The only way to be eligible is to work. Workers must pay taxes to the Administration, or they will not get retirement checks.
Bear in mind that only workers who paid enough taxes for at least ten years can collect Social Security retirement checks. In those years, the Administration will give you work credits. Remember that you can only receive 4 work credits per year. If you have $1,640 in earnings in 2023, you can get one work credit.
SOCIAL SECURITY AND YEARS OF WORK
Even if you can receive retirement benefits by just working 10 years. It is not advisable to do so. In fact, the Administration will work out the total amount of your payment using the 35 years with the top earnings in your work history.
Therefore, if you only work for ten years, your check will be too small. Working for at least 35 years can allow you to get more money per month. What is more, you should try to look for jobs that are well-paid.
Promoting or looking for better jobs is a must. The higher your wage, the higher your Social Security check will be. On many occasions, it is not the worker the one who receives most checks. If a worker passes away, their family can be entitled to survivor benefits.
Perhaps you may have enough for yourself, but thinking about your family can also be beneficial for their well-being. Do not forget that if you never pays taxes, you will get no retirement payments from Social Security.
RETIREMENT AGE AND THE RIGHT AGE TO GET SOCIAL SECURITY
So far, we have learned that you’d better work for 35 years and you’d better get a well-paid job. As a matter of fact, only high earners who earn the taxable maximum for 35 years can receive the largest retirement check.
Nevertheless, this is not possible if you do not delay retirement. The largest Social Security benefit will only be for those who earn the taxable maximum for 35 years but also file at the age of 70. Early filing is the best way to reduce your retirement benefits.
Social Security warns that those who file at 62 can get a reduction of about 30%. That is why it is important to know your Full Retirement Age, 67 if you were born after 1960. The normal retirement age allows you to get 100% of your retirement benefits.
Delay retirement as much as possible after Full Retirement Age. That is the only way to increase your Social Security by a staggering 24%. So, you can get 8% extra per month. Can you really afford to say no to all that cash? If so, go ahead and file early.