The Social Security Administration (SSA) can pay checks worth $4,555 in 2023. After the latest Cost of Living Adjustment, all the amounts have changed. So, the current amounts will soon be completely different.
Actually, there are several things that can help you get more from Social Security. If you have not filed for benefits yet but you are thinking about it, make sure you know how to make your monthly payments grow.
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These three requirements to get $4,873 in 2024 can allow you to increase your benefits. Every little bit counts since inflation can drain your retirement savings sooner than you expected it.
WORK FOR 35 YEARS BEFORE YOU FILE FOR SOCIAL SECURITY
The Administration will only take into account 35 years of your work. SSA chooses up to 35 years with the top earnings. By doing so, they can work out the full amount using a formula.
If you have not worked for at least 35 years and you can retire because you are 62 years old or older, work until you achieve it. Otherwise, your monthly payments will get a reduction.
Remember that the older you file for Social Security, the longer you will have to save and invest your money. In this way, you will achieve a larger nest egg and you will have a more peaceful retirement.
Delaying retirement is beneficial from a financial point of view until you reach 70. From that moment onward, your benefits will no longer grow. Social Security will give you a 24% extra per month if you delay retirement until you are 70.
EARN THE TAXABLE MAXIMUM FOR 35 YEARS
Apart from retiring at the age of 70 and working for 35 years, you must earn the taxable maximum too. This is obviously the most challenging requirement of the three.
Most people may be able to choose their retirement age and the number of years they want to work. The salary may not be something everyone can choose. But as long as you can, you should get promoted and apply for well-paid jobs if possible.
Earning the taxable maximum for 35 years can be a real challenge. For your information, the taxable maximum in 2024 will be 168,600, up from $160,200 in 2023 and $147,000 in 2022.
If you managed to get all that money for 35 years and file at the age of 70 in 2024, you will receive the largest Social Security payment. Early filing at 62 could reduce it to $2,710 or $3,822 at Full Retirement Age. The more you pay to Social Security, the higher your benefits will be.
WHAT IS SOCIAL SECURITY?
Social Security is a government program that provides financial benefits to people who have worked and contributed to the system throughout their working lives. It is designed primarily to help citizens in old age, disability or survivor and dependent situations.
Funded by payroll taxes, Social Security provides pensions to retirees and disability benefits to those who are unable to work due to severe medical conditions. It also provides support to family members of deceased workers.
This system is crucial to the financial security of millions, ensuring a stable income in challenging circumstances.