They take the average amount you earned and adjust for wage growth and inflation to come up with a monthly amount. SSA takes your 35 highest earning years to calculate the average indexed monthly earning (AIME). So, if you earn at least $6,040 a year, you earn the four credits and if you earn at least that much for ten years, you qualify for Social Security benefits. Each credit is earned by making $1,510 quarterly in taxable income. The maximum amount you can earn in a year is four credits. You have to have earned at least 40 work credits. Social Security is based on the money you earn over your entire working life.
Social Security is often seen as the foundation of retirement income, because it is guaranteed and inflation proof. These increases are called cost-of-living adjustments (COLAs). Social Security payments are typically increased by a small percentage every year. Roughly half of the respondents admit that they are unsure when they will claim Social Security.Įthen Kim Lieser is a Washington state-based Science and Tech Editor who has held posts at Google, The Korea Herald, Lincoln Journal Star, AsianWeek, and Arirang TV. Retirement Survey, only ten percent of non-retired workers aged forty-five and over plan to wait until age seventy to begin filing for benefits, while thirty percent plan on taking Social Security between sixty-two and sixty-five and fourteen percent between sixty-six and sixty-nine. With delayed retirement credits, a person can receive his or her largest benefit by retiring at age seventy,” it continues.ĭespite the higher benefit payouts, it appears that most Americans aren’t willing to wait. “Starting to receive benefits after normal retirement age may result in larger benefits.
A worker can choose to retire as early as age sixty-two, but doing so may result in a reduction of as much as thirty percent,” the SSA says.
If a worker begins receiving benefits before his/her normal (or full) retirement age, the worker will receive a reduced benefit. “Workers planning for their retirement should be aware that retirement benefits depend on age at retirement. Perhaps the biggest decision one can make to net a higher payout is to wait until age seventy to file for benefits.
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