Every new year that begins in the United States all the checks issued by the Social Security Administration increase thanks to an element called COLA. This is an acronym for Cost of living adjustment and serves precisely what its name implies. Thanks to COLA, retirees can see their monthly check adjusted to the current price.
Inflation causes the price of things to increase every year and Social Security checks try to adjust for that. So we can’t think about a country’s economy without thinking about COLA as a tool for balancing retirees’ lives and expenses. The COLA increase depends on several factors each year.
The most important factor in determining what the Social Security COLA increase will be each year is the CPI-W for the months of July, August and September. Based on that figure, the United States government increases the monthly amount of the checks.
Therefore, in each new year the maximum Social Security check changes, so retirees always receive more money at the beginning of each year. However, no extra action is needed to increase this check, as it is automatic. Retirees who already have the benefit accepted will not need to work more to increase it.
Also, citizens who are not yet collecting Social Security will be able to calculate their benefit base with the COLA already included. This makes the retirement process much easier.
Early Retirement Age Maximum Benefit in 2023
When it comes to applying for a Social Security check, we must meet a minimum of requirements. We are talking in this sense about the age retirement benefit. Disability retirement is totally different and beneficiaries receive checks on a more individual basis.
As for retirement by age, Social Security can be applied for at 62 years of age. However, it should also be remembered that it is mandatory to have worked a minimum of 10 years to be able to apply for this retirement.
As for the maximum amount, the check we can get with Early Retirement Age reaches $2,572 per month. This is a far cry from the maximum $4,555 that we can reach when we retire at age 70.
Why do early retirees collect less Social Security?
The reason the Social Security Early Retirement Age check is lower is that retirees collect 30% less of the money contributed. If we have reached a check of $2,000 per month we will ultimately receive only $1,400 per month.
In order to get 100% of the money we have contributed as a worker, we must reach 67 years of age before retiring. Even so, it may be worth not waiting that long to start enjoying the golden years. It all depends on each individual’s point of view.
How do I maximize my Social Security early?
When it comes to maximizing a Social Security check we must take into account three elements. These elements are retirement age, years worked and salary as a worker.
When we apply for Early Retirement Age we are completely eliminating retirement age from this equation. In this sense, we must play with the other two elements if we want to maximize the check until we get the $2,572 per month.
To do this, we must consider the following:
- Work for 35 years. The minimum years worked is 10, but that will not be enough. If we want a large Social Security check we must work a minimum of 35 years. This is what will make it so we can maximize the check.
- Have a good salary. With a good salary we will pay more taxes every month. At the end of the day, the Social Security check depends on the taxes we have paid as a worker. So the more taxes the better the retirement benefit.
If we maximize these two aspects the monthly Early Retirement Age payment will be as close as possible to the maximum Social Security payments. Still, remember that to get the maximum check of $4,555 it is mandatory to reach age 70 before retirement.