Any inhabitant of the United States dreams of having a good retirement in the future. Anyone who thinks this way should know that the Social Security Administration has a number of requirements for paying benefits. If you meet those requirements, you will collect a benefit. It is also possible to increase that monthly payment.
Below we will look at 6 elements to keep in mind even if your retirement is a long way off. The important thing is to control all this information so that Social Security is not a problem in the future. In addition, it is also good to know all this information so that your benefit is as large as possible. And if you still have time to rectify something you have done wrong, so much the better.
The 6 facts about Social Security that you need to know
The more information you can keep track of, the better. If you know everything, you’ll be able to increase your monthly Social Security benefit a bit in the future. This tips will benefit you to live a better rest in retirement. Let’s look at these 6 important facts:
The amount of Social Security depends on your income as a worker
Although it may seem obvious, some people don’t think about this Social Security fact. If you have a high salary, you will receive a better benefit in the future. Low salaries mean a minimum benefit and that is something no one wants. It is also important to keep in mind that only 35 years with a high salary are considered for the benefit. Thus, if you have worked for 45 years, the 10 years with the lowest salary do not add dollars to the average.
There is a maximum on Social Security payments
It is not possible to increase Social Security infinitely. There is a cap on taxes levied on the wages of American workers. While it is true that the limit is quite high, it does exist. If you earn more than $147,000 a year, you will pay no more taxes. Despite this, there is a bill that wants to tax high wages to ensure an increase in benefits. It has not yet been accepted, but it could become effective soon.
For 2022, the limit is the following maximum is the following:
- Collecting it at Early Retirement Age (62): $2,364.
- Collecting Social Security at Full Retirement Age (67): $3,345
- Collecting it after FRA at 70 years old: $4,194
Don’t Retire Too Early
While it’s true that you can retire at age 60 and stop working altogether, it may not be a good idea. Remember that the Social Security Administration will take your 35 highest-earning years worked. If you have not worked that many years, each year below will add $0 to the account. If you reach age 60 with 35 years worked with a good salary, go ahead. But otherwise it is not advisable.
You don’t need to reach Full Retirement Age
Contrary to what many people think, it is not mandatory to reach Full Retirement Age (FRA) at age 67 to apply for retirement. You can retire at 62, even though you will receive 30% less than what you have contributed as a worker. However, you need to have earned 40 work credits. You have to work 10 years in total to reach that number of credits. If you don’t, claiming retirement benefits is impossible.
Patience pays off
You can retire at 62, yes, but it’s not always a good idea. If you have a high benefit, it may pay off if you’ve managed to save money. But it’s not common because of the pace of life in the United States. Waiting until age 67 ensures a 100% benefit, so it may be the best option to live retirement more comfortably and happily.
Check your Social Security online
One of the great advantages of the advancement of the Internet is that many bureaucratic procedures can be done without leaving home. Among those procedures is checking how our Social Security retirement benefit is going. All you need to do is create an account on My Social Security and there you will have all the information available. In addition to this, you can also change data if you need to, such as your address or marital status.