Los Angeles, California – In the United States, there is no set retirement age, nor is there a specific age at which one must claim Social Security benefits. This flexibility allows individuals to choose to work until the age of 70 before signing up for Social Security, potentially resulting in a more generous monthly benefit.
Upon reaching full retirement age (FRA), which can range from 66 to 67 depending on birth year, individuals are entitled to their full monthly Social Security benefit based on their personal income history. By delaying filing for Social Security beyond FRA, for each year, the monthly benefit increases by 8%, providing a permanent boost to enjoy.
For those filing for Social Security at age 70 this year, the maximum monthly benefit achievable is $4,873. However, to receive this amount, individuals must have worked for 35 years and earned a wage that exceeds the Social Security wage cap for all 35 years, currently set at $168,600 for this year.
While Social Security is mainly funded by payroll taxes, individuals do not pay taxes on all of their income. Each year, a wage cap is established, and if earnings have exceeded this cap consistently, individuals may be in line for the maximum monthly benefit. However, to qualify for this benefit, earnings must have been consistently high throughout one’s career.
Delaying filing for Social Security until age 70 can result in a substantial increase in monthly benefits, even if not eligible for the maximum amount. Even a monthly benefit of $3,873 or $3,000 can significantly impact one’s retirement finances.
By continuing to work and delaying Social Security filing until age 70, individuals have the opportunity to increase their monthly benefit. Whether through seeking higher wages in the last few years of their career or exploring additional income sources, there are financial gains to be made by claiming Social Security at 70.
It is crucial to understand the various strategies and options available to maximize Social Security benefits to ensure a more secure retirement. By taking control of one’s financial future and making informed decisions, individuals can retire confidently with the peace of mind they deserve.