When we make a retirement plan in the United States we must take into account a large number of factors. The Social Security Administration determines how much they will pay us monthly in our retirement depending on several elements. In order to achieve a good retirement, we must maximize these elements.
One of the biggest factors influencing the Social Security benefit is years worked. With an insufficient number of years worked, not only will we get a very small check in retirement, but we may not even receive a pension at all. That is why it is so important to keep this differentiating factor in mind.
The rule is quite simple. The longer we work, the better Social Security we get. Even so, there is a limit and we must combine the years worked with another element to get the maximum possible benefit. It is not enough to work without taking into account the salary element, so we must watch out for both aspects.
How many years must I work to get a good Social Security?
Here we must differentiate between the years worked to get Social Security and the years worked to get a good Social Security check. In the first case, we must work at least 10 years. This will assure us a retirement benefit, although it may not be very large.
In the second case, things change a lot. In order to get a good Social Security check during retirement, we must work 35 years. Each year worked below that figure will add $0 to our average benefit. Therefore, we must reach the 35-year work record if we do not want our pension to take a very large reduction.
While it is true that salary is important, so is reaching the minimum of 35 years worked. It is much better to work for all those years with an average salary than to work only 30 years with a very high salary. In the end, the average of all the years is what counts.
Other Factors Affecting Retirement Pensions
In addition to the years worked factor, there are two other elements that affect the Social Security retirement benefit. The first of these factors is retirement age and the second is salary, as previously discussed.
Regarding retirement age, we have several options. If we want to retire by age, we must be at least 62 years old. Although it is possible to apply for Social Security at that age, it is not recommended. This will cause us to lose 30% of the money we have contributed while working. To obtain 100%, it is mandatory to wait until the age of 67.
All ages between 62 years of age and 67 years of age are also an available option for retirement. In each year, the Social Security Administration will subtract a little less than 30%, so the final decision is ours.
On the other hand, salary also plays a role, as we have already discussed. At the end of the day, the Social Security pension comes from the taxes we have paid. For that reason, we should have the maximum salary possible. The higher the salary, the more taxes. And the more taxes we pay, the better retirement we will have.