You’ve worked for decades to save in your Social Security retirement fund. You already meet the requirements and the next thing is to start the procedures to achieve a good retirement, getting the money you deserve so much, after having made the United States the best country in the world.
Before applying for Social Security benefits, you should have made a number of decisions and weighed up some important facts to do the best you can with your retirement savings. We tell you what are those decisions and assessments that you must make to enjoy a good life in old age.
How to Get the Most Out of Your Social Security Benefits
As we said before, at the time of submitting your application, you already know that you should know at what age you would like to start receiving your retirement benefits. For example, if you turn 65 years of age in the month of November 2024, you could choose to start enjoying your retirement immediately.
However, if you did not reach that age, you also have the possibility to apply for your benefits from the age of 62. This has a small problem, or maybe it’s not a problem for you (it depends on your situation): you’re going to receive a substantially smaller monthly payment than if you waited until age 65. In the other direction, you might want to wait until you’re 70 to receive a higher amount, since, starting at age 65, each year of waiting increases your monthly benefits.
Thus, at the age of 62, the maximum you can receive monthly is $2,710, while between the ages of 65 and 67 (your full retirement age), the maximum monthly that a retiree can receive is $3,822. Now, if you wait until age 70, the highest age at which a beneficiary can withdraw, in the year 2024 the maximum you can claim per month is $4,873, fulfilling all the requirements.
How Much Must You Earn in Your Lifetime for Max Benefits?
In addition to the age at which you start receiving your benefits, the Social Security Administration takes into account the 35 best years of income, that is, the years when you had the highest income from lucrative activities, and which resulted in higher Social Security tax payments. For example, in 2024, if you are aiming to receive the maximum amount of Social Security when you retire, you will need to earn at least $168,800 annually, an increase of $8,400 over last year.
The maximum taxable amount is modified every year by the SSA, which will undoubtedly be different by the time you reach your retirement age. To give you a clear idea, in 2003, 21 years ago, the taxable maximum was $87,000, while in 2022, 2 years ago, the maximum was $147,000.
It also impacts on the maximum amount to be paid the so-called Cost-of-Living Adjustment (COLA). This is an increase decreed to accompany inflation, in order to prevent retirees and Social Security beneficiaries from losing purchasing power. In the year 2023, after the coronavirus pandemic, the COLA was 8.7%, a historical number that had not been seen in decades, but in 2024 it was much lower, at just 3.2%.