A major component of your retirement strategy should be maximising your Social Security benefits. The guaranteed lifetime income provided by Social Security is an even more crucial component of maintaining your financial security as you age because Americans frequently enjoy longer retirements.
The maximum Social Security benefits will rise once more in 2023 thanks to a nearly record-high cost-of-living adjustment (COLA).
2022 Social Security Maximum
Your work history and the age you decide to start receiving benefits will both affect your Social Security benefits. The maximum Social Security benefit is $3,345 per month if you begin collecting benefits in 2022 at full retirement age.
Your retirement benefits will be lower if you were fortunate enough to retire earlier. Age 62 is the earliest you can apply for Social Security retirement benefits. The maximum Social Security benefit (which has decreased by about 30%) at age 62 is $2,364.
Age 70 is the latest you can postpone starting to receive Social Security benefits. Your monthly income may increase significantly if you delay receiving benefits. The top Social Security benefit at age 70 is $4,194 in 2022.
The majority of retirees receive much less in Social Security benefits than what you just saw in the aforementioned figures. The average Social Security check, as reported by the Social Security Administration, was $1,542.22 as of June 2022.
Cost-of-Living Adjustment For Social Security In 2023
The annual cost of living rise for 2023, according to the Social Security Administration, will be 8.7%. In 2023 and beyond, the maximum Social Security payout will increase as a result of this increase.
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Social Security Benefits Maximum 2023
The new maximum Social Security numbers will increase in 2023 due to the Social Security COLA of 8.7%. The highest monthly Social Security income for people collecting benefits at age 62 should be close to $2,570.
Your maximum Social Security income in 2023 will be around $3,636 per month if you wait until you reach Full Retirement Age. The amount you receive increases by around 30% a month if you delay retiring until age 62.
Waiting until age 70 will yield the highest Social Security income possible for individuals who are patient, want to receive the maximum benefits, or maybe are just working a little longer. At age 70, the maximum monthly Social Security payout will be close to $4,559.
Although receiving nearly $55,000 in Social Security benefits annually may sound amazing, assuming you are eligible for the maximum payment, this is probably just replacing a small fraction of your pre-retirement income.
How Will The Amount Of My Social Security Benefits Be Determined?
Your 35 highest-earning years of employment are used to determine your Social Security payments. A few changes are made to take inflation into consideration. Your retirement Social Security benefits will probably be smaller if you haven’t worked the required 35 years.
Your final Social Benefits were calculated by the Social Security Administration (SSA) using your Average Indexed Monthly Earnings, or AIME. You can calculate your AIME by multiplying the total of your indexed salaries by 420.
Ultimately, a number of variables—including the age at which you begin receiving benefits—are used to determine how much your actual Social Security payout will be. Keep in mind that the SSA will reduce your benefits if you begin receiving them before to reaching full retirement age.
How Can I Get My Estimated Social Security Benefits?
Obtaining a projection of your potential Social Security benefits might be useful, even if you are a long way from retiring. You should verify your Social Security benefits yearly if you’re getting close to full retirement age.
On the SSA website, you can register to view your official Social Security work history and projected future benefits. It costs nothing to open an account.
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