Social Security started as a support for seniors to make ends meet. It is not meant to replace your life savings and other retirement savings plans like 401(k). However, as people live much longer than a few decades ago, it is of vital importance to get the highest cheque possible. Maximizing it would be key to be able to get by and have a more peaceful retirement.
Having in mind that this is a very important investment, you should keep working for at least 35 years. Social Security will choose the highest-earning years of those 35. You may have worked for 45 years, but they would discard the lowest-earning years. Then they will do the maths and make use of the average indexed monthly earnings. The AIME formula will determine your retirement benefit.
Having worked fewer than 35 years will decrease your Social Security benefit
Bear in mind that if you work for 30 years, for example, those 5 missing years you have not worked count as a zero for each of them. This is something you should avoid at all costs. Keep working until you have done so for 35 years. Not to mention that the higher your earnings are, the higher your Social Security cheque will be.
Another important thing to max benefits out is to delay retirement. The longer you delay claiming Social Security retirement benefits, the more money you will have. Many Americans are reluctant to retire at the age of 70, but they need to think if they can afford to retire by 62, the earliest age possible. Can you imagine getting 24% extra for your benefit? That is what you get if you retire at 70.
Take advantage of the fact that wage indexing ceases at age 60
This is of vital importance because the earnings after you are 60 years old are not indexed. So, they go into your earnings records and could help you increase your future SSA benefits. As you may have a higher salary now than a few years ago, they will help you boost your 35 top earning years. If it replaces a year that was zero or a lower-earnings one, that might come in handy.
The last two things to be aware of are also important. The first one is when to claim spousal benefits. It applies to those whose birth was before January 2, 1954. Besides, you both must be at FRA. You could then claim spousal benefits while you let your Social Security benefits increase. Then by 70, choose the highest one.