The future of Social Security for all United States citizens is uncertain. Sometimes it is impossible to really know whether we will collect a good benefit or not. We may encounter problems with the trust funds, with our benefit, or with many other issues. Inflation and the lack of money in Social Security do not bode well for retirement benefits, so we should try to maximize our benefit.
It is true that maxing out Social Security to the limit is a bit difficult, but it is possible. Achieving the benefit of $4194 per month, or $50,328 per year, may be difficult, but it is not completely impossible. What we do need to be clear about is that to end up with a pension like this we need to start taking action as soon as we start working.
Tips for having a Social Security of $50,328 a year
The tips we are going to give you below serve to maximize Social Security. Remember that achieving the limit is very difficult, since it requires a salary that is too high. If you don’t get the maximum benefit, you can at least get a large amount of extra money every month.
- Pay as much tax as you can: during your working years, paying your Social Security taxes causes your retirement benefit to increase. Taxes are calculated based on the size of your paycheck. If you receive a very large amount of money as a worker, you will collect more taxes. Therefore, if you pay more taxes, your SSA retirement benefit will be higher.
- Work for 35 years: You must work at least 35 years before you apply for retirement. The final benefit is calculated by averaging the 35 years of work at the highest salary. If you have worked 34 years, the missing year adds $0 to the average. This causes the final benefit amount to drop dramatically.
- Do not apply for Early Retirement Age (ERA): To maximize your Social Security, do not apply for ERA, but wait until Full Retirement Age (FRA) or even work a little longer, up to age 70. ERA can be applied for at age 62, but you will get 80% of your benefit. On the other hand, the FRA is at 67 and you receive 100%. Finally, if you work until age 70, you will receive 100% and an extra benefit every month. After age 70, continuing to work will not add to your benefit.
Taking these three tips into account, you could reach the benefit of $50,328 per year. Remember that working 35 years minimum with a good salary and applying for the FRA are the key to getting the maximum in Social Security Administration benefits.