(DailyAnswer.org) – Planning for maximum Social Security benefits after retirement is a process that many Americans don’t realize needs to happen while you are still in the midst of your working years. Your decisions before retiring can make a difference of upwards of $1,800. Let’s take a look at how you can qualify for your maximum benefits, and some ideas on how to make it happen.
How Social Security Works
Social security benefits are calculated based on the highest-earning 35 years of a retiree’s working years. The exact formula calculates for factors such as the general wages of workers over the years and specific bend points, which create reductions in benefits based on higher earnings. Your benefits will be calculated based on when you choose to begin drawing on your benefits. Finally, the amount Social Security pays recipients does fluctuate with inflation.
How to Get Up to $1,800 More When You Retire
The complexity of the formula used to determine your Social Security benefits means that it can be difficult for the average American to understand how to get the most out of their earned benefits. In fact, you may be eligible for up to $1,800 worth of additional monthly benefits through careful planning.
What To Do Before Retiring
Before reaching retirement age, consider increasing your income through a higher-paying job or a side business. This can make a big difference because the Social Security Administration (SSA) will use your 35 highest earning years to determine your benefits, so during your prime working years consider increasing your income.
Because this formula works across your entire working career, which typically covers around 50 years for the average American, you can make the most of your highest earning years without worrying about break years or the years leading up to retirement having to push ahead at full speed. Use your best 35 years to build up your potential benefits.
Advantages of Waiting Until Full Retirement Age or Beyond
Social Security benefits are also adjusted based on when you choose to begin collecting. Congress has the right to change what they consider the full retirement age (FRA), and they established a calendar in 1983 that continues to factor in increased life expectancy to raise the retirement age. However, you can choose to begin drawing on Social Security benefits as early as 62, but you will only receive a portion of your entire entitled amount.
If you wait until past your full retirement age, the SSA offers a credit for delayed retirement. This, combined with your maximum earnings during your working years, can mean a bigger monthly check when you do retire.
Considerations on How to Have the Most to Live On During Retirement
You can make the most of your retirement by capitalizing on a maximum Social Security benefit and by considering continuing to do some sort of work even after retirement as your health and energy allow. If you begin a side hustle during your working years, you can help assist the goal of maximizing your income during your prime working years and create a business you could continue to do part-time after retirement. Some retirees consider:
- Using their experience to work as a consultant
- Renting out extra rooms in their homes
- Pet-sitting
- Freelancing
- Offering their wisdom as an online content creator or life coach
Closing Thoughts
American retirees can get the most out of their Social Security benefits by earning as much as they reasonably can during at least 35 of their working years and delaying retirement until they reach full retirement age. To continue living a comfortable lifestyle as your energy may decrease with age, consider focusing more on your side hustle after you have spent at least 35 years working at your peak. Understanding how your choices now can affect your Social Security benefits can help you make the best decisions on how to get the most out of your retirement.
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