Planning for retirement is critical for long-term financial security. Workers in the United States can apply for Social Security benefits once they reach the age of 62. However, the monthly payment varies according to the age at which you claim it.
The longer you wait—until age 70—the greater your benefit will be. As a result, understanding how and when to apply is critical for increasing your retirement income.
The amount you receive is calculated using your lifetime earnings. The Social Security Administration (SSA) offers online tools to estimate your benefit based on your age and work history.
It’s also important to know your Full Retirement Age (FRA), which ranges from 66 to 67 depending on your birth year. If you continue to work after this age, your benefits will not be reduced.
Steps to Calculate Your Retirement Benefits
To estimate how much you will receive in Social Security benefits, follow these steps:
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Create or log in to your “my Social Security” account
The SSA provides an online platform where you can check your earnings record and get personalized benefit estimates. Sign up or log in at my Social Security. -
Review your earnings record
Ensure that all your lifetime earnings have been correctly recorded. Your benefits are based on these earnings, so any errors could impact the amount you receive. -
Use the SSA benefit calculators
The Social Security Administration offers several tools to estimate your benefits:- Online Calculator: Provides a detailed estimate based on your earnings history.
- Quick Calculator: Gives a basic estimate based on your birth date and current earnings.
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Determine your Full Retirement Age (FRA)
Your Full Retirement Age is when you can receive 100% of your benefits. For those born in 1960 or later, the FRA is 67. You can check your exact FRA using the SSA calculator. -
Decide when to claim your benefits
- If you claim benefits before your FRA (as early as age 62), your monthly amount will be lower.
- If you delay your claim beyond your FRA, your benefits will increase until age 70.
Other Factors That Affect Your Retirement Benefits
In addition to the timing of your application, several other factors may impact your benefit amount:
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Continuing to work
If you earn more than the annual limit before reaching your FRA, your benefits may be temporarily reduced. However, after reaching your FRA, you can work without any reductions in your monthly payments. -
Taxes on benefits
If your total income (50% of your benefit amount plus other earnings) exceeds $25,000 per year for individual filers or $32,000 for joint filers, you may have to pay federal income taxes on your benefits. -
Medicare deductions
At age 65, you become eligible for Medicare. If you enroll in Medicare Part B (medical insurance), the premium will be deducted from your Social Security benefits.
Special Rules and Additional Benefits
Pensions from jobs that did not contribute to Social Security will no longer be used to reduce benefit amounts beginning in January 2024. In addition, specific rules apply to certain types of employment, such as agricultural workers, government employees, military personnel, and railroad workers.
If you are eligible for spousal benefits, the maximum amount is reached at Full Retirement Age, but it does not increase if you claim after that point. Spouses can apply for survivor benefits starting at age 60 (or 50 if disabled).
Because retirement decisions can have a significant impact on financial security, it is prudent to consider all available options and consult with a financial advisor. Proper planning and a well-informed approach can make a big difference in ensuring a secure retirement.
