Topping Off Social Security Benefits
When you have been planning for your retirement years throughout your working life and the finish line starts to come into focus you may have some questions about the details of your Social Security benefits. Most Americans count on Social Security as a sure source of retirement income and plan accordingly throughout their lives. But even those who could possibly do without it have paid into it so it is only natural that they are interested in getting the most out of their contributions into the program.
Many people are not aware of the fact that your personal choices can impact the amount of the benefit you receive considerably. Full retirement age for people born between the years 1943 and 1954 is 66 years of age as of this writing. Full retirement age goes up by two months a year until 1960; for Americans born during this year and later 67 is the full retirement age.
However, you don’t have to wait until you reach the full retirement age to apply for Social Security benefits. You can do so when you’re as young as 62, but you receive a reduced benefit which varies depending on the year that you were born. For people born between 1943 in 1954 your benefit would be reduced by 25% if you retire at the age of 62.
Conversely, you can go the other route to maximize your Social Security benefit by working beyond the full retirement age. People born in 1943 and after can earn an additional 8% for each year that they work past their full retirement age up to the age of 70.
In addition, you may well be paid more per year during these three years than you were earlier in your life. Since your Social Security benefit amount is calculated based on your 35 highest earning years, these additional years could supplant years during which you made less which would result in an increase in your benefit when you do finally apply for Social Security.
