If you live in the United States and are thinking about retirement there are several things you should know. The Social Security Administration makes this information available to everyone, but not everyone knows or understands it. Having a good understanding of each of the variations that can change your Social Security retirement benefit is vital to getting a higher figure.
Once you know how this retirement system works, you can make better plans for the future. Although not everyone can maximize their monthly retirement payout, it can be increased a bit. The maximum payout is $4,194 per month, but it is difficult to achieve because of all the different factors involved.
Retirement age
All Americans need to know when to apply for retirement. As of today, the vast majority can start applying for retirement at age 62. This retirement model is called Early Retirement Age (ERA) and provides a benefit of 70% of Social Security contributions. If you want to reach 100% you need to wait until the age of 67 to get it.
It is not mandatory to retire at 67, since you can continue working as long as you need to. The maximum age at which contributions can be made is 70. After that age you cannot accumulate more money in Social Security, so working more years will not give you a better benefit. You can do this and even combine benefits with work in order to have two sources of income.
Years of Social Security contributions
The minimum number of years required in the Social Security system to receive the retirement benefit is 10 years. With these 10 years, 40 credits can be obtained, which means that we have a very low benefit. To get a good monthly payment it is necessary to work 35 years with a good salary every month.
Each year not worked will add $0 to your Social Security, which will bring the average down considerably. It is better to work 35 years at an average salary than to work only 30 years at a great salary, as far as the final benefit is concerned.