For many people, the dream of retiring with all of their costs paid for by Social Security is something they look forward to their whole working lives.
In fact, more and more people are setting the even higher goal of retiring early so they can start making use of those benefits right away.
The Social Security Administration (SSA) is clear about the rules it follows. The SSA is in charge of many programs, including retirement benefits. You can not start getting retirement benefits before age 62, and there is a fee for doing so.
Claiming Social Security benefits
Let us start over. Not every worker is eligible for Social Security. In order to get them, you must have worked for at least 10 years and made enough money that the SSA considers it taxable.
As per the SSA, to get Social Security benefits, you need to have earned at least 40 Social Security credits. You get credits when you work and pay into Social Security.
The benefits you get are the same no matter how many credits you have. The number of credits you have earned tells us if you can get retirement or disability benefits, Medicare, and if your family can get survivors’ benefits.
Each year, the amount of income needed to get a credit changes. For example, in 2024, you can get one Social Security and Medicare credit for every $1,730 in covered earnings. This means that you would have to make $6,920 to get all four credits for the year.
You will only get the minimum amount of benefits with these many credits, but most people who claim retirement benefits have worked for more than the minimum amount of credits, so this might not be the case.
To get the most money in Social Security benefits when you retire, you need to have paid the most in payroll taxes for at least 35 years. This means that you will not get the most benefit possible if you worked less or did not pay the most.
The payroll cap in 2024 was 168,600, which means that people making less than that amount will not be able to get the most out of the program.
Something else to think about is that the amount of benefits you can get will depend on how old you are when you retire.
If you have paid the maximum amount into Social Security for the required 35 years, you can start getting benefits at age 62. However, the most you could get in benefits in 2024 is $2,710.
Most people think that age 65 is full retirement age, which is the next age when people like to retire. This age is set by Congress based on the day you were born. For people born between 1943 and 1954, the full retirement age is 66.
For people born between 1955 and 1960, it will rise slowly until it reaches 67 for people born after 1960. For those who know, you can still get Medicare benefits at age 65, which used to be the first full retirement age.
In 2024, the most you can get in benefits if you retire at full retirement age is $3,822. This is more than what you could get at age 62, but many people can still do better.
A third way to retire that many people do not know about is to wait until you turn 70 to get the most benefits from the Social Security Administration. This is mostly because it is the hardest to do.
You can get an extra 8% in benefits for every year you wait after you reach your full retirement age. In 2024, this means that the most benefits will be $4,873.
