Select Page

Social Security is the bedrock of retirement income for many Americans. This guide will help you with some of the basics that have to do with saving for your retirement years. Educating yourself will ensure you get the maximum retirement benefit amount you are entitled to.


Know Your Retirement Age

Before you start working, determine the full retirement age of Social Security. It generally ranges from 66 to 67 for people born between 1943 and 1954. Some people can claim their Social Security benefits several years before their full retirement age. If you retire before you reach retirement age, you may have to wait to get your benefits.


Understand How Social Security Benefits Are Earned

To be eligible for Social Security, you must have at least 40 credits during your career. This amount is usually earned throughout the year for each year you work. Last year, you had to have earned $1,470 to get one credit and more than $5,880 to get the maximum of four credits.


How Benefits Are Calculated

Your Social Security benefits are computed based on the 35 years of earnings that you have earned. If you have fewer than that amount of years, your benefit will be zero. There is a maximum monthly benefit amount that you can receive depending on your age at retirement.


Learn How to Estimate Your Benefits

One of the most valuable features of Social Security is the benefit adjustment, which is known as a COLA. It helps keep up with increasing expenses. The calculation of the COLA is based on the changes in the consumer price index during the year. In 2021, 1.3% was the average monthly benefit adjustment. According to a study conducted by Kiplinger Letter, the COLA for 2022 could be 6% or more.


Your Monthly Benefits Can Increase If you Wait Longer to Claim

Although you can collect benefits as early as 62, taking them before your full retirement age will result in a reduction in your monthly payments. You’ll receive less than 100% of your Social Security benefit until you reach full retirement age. But, by waiting to claim until 70, you can get a big bonus and get more each month.

Claiming your benefits later can help your heirs get more benefits. For instance, if a high-earning wife dies before her husband, she could leave a bigger survivor benefit to him.