You may not be able to choose exactly how much you want from Social Security each month, but you do have some control over the size of your checks. Unfortunately, there are too many people who settle for small benefits because they do not understand the factors that affect the size of their checks in the first place. Here are five of these factors to keep in mind, along with tips on how to leverage this knowledge to maximize your social security benefits.
1. Your salary
Your Social security benefit is based on your salary during your working years. A larger income typically leads to larger benefit checks, but this is not the case for those earning more than $ 147,000 in 2022. This is the maximum income that is subject to Social Security taxes, so earning more will not increase your benefit.
But as long as you are below this threshold, everything you do to increase your income today will also help your social security checks later. You can try starting a sideline, negotiating a pay rise or switching companies if you find another employer who is willing to pay you more.
2. How many years you have worked
The government only looks at your income from your 35 highest earning years when calculating your social security benefit. For those who do not work at least 35 years, it includes zero-income years in their calculation. This significantly reduces their benefit amount.
Whenever possible, you should strive to work for at least 35 years, but you do not have to stop there. Working longer often increases your paycheck because most people earn more later in their careers than when they were young. After passing the 35-year mark, their higher earning years begin to replace their lower earning years in their benefit calculation.
3. Your year of birth
The social services assign everyone one full retirement age (OFF) based on their year of birth. If you were born between 1943 and 1954, your FRA is 66. Thereafter, it increases by two months each year thereafter until it reaches 67 for those born in 1960 or later.
You will have to wait for your FRA if you want to claim the full benefit you are entitled to based on your work history.
4. Your requirements age
You can require benefits already from 62 instead of waiting for your OFF, but doing so diminishes your checks. You only get 70% of your full benefit per. check if your FRA is 67 and you claim 62. Those with an FRA of 66 get 75% of their full benefit per. check if they make claims as soon as they are justified.
Each month you defer benefits, your checks increase slightly, and this continues past your FRA until you turn 70. This is when you qualify for your greatest benefit. You get 124% of your full benefit per. check if your FRA is 67, or 132% if your FRA is 66.
5. Your life expectancy
Your life expectancy plays a big role in how much you get from Social Security overall and at the ideal time for you to sign up. People with longer life expectancy typically earn more money by postponing social security, while those with short life expectancy often prefer to sign up immediately at 62.
It’s ultimately your call when you sign up for benefits, and there are other factors to consider, such as your ability to pay bills without Social Security checks. But you should definitely keep your life expectancy in mind when deciding on your rave.
Collects it all
You may not be able to change all of the factors listed here, but by understanding how they come together to affect your social security checks, you can make better decisions that will give you as much money as possible.
Review the above factors and keep an eye out for any opportunities to increase your benefits. Also choose a preliminary cradle. But you should not feel that it is carved in stone. You can always adjust your social security strategy as you go.
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