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What Is The Highest Social Security Benefit

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Social Security – Maximum Family Benefit

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If You Have Lived In Canada Less Than 40 Years

Not everyone receives the full Old Age Security pension. The amount you receive depends on the number of years you have lived in Canada.

If you lived in Canada for less than 40 years you will receive a partial payment amount. Your payment amount is based on the number of years in Canada divided by 40.

You can delay your first payment up to 5 years to get a higher amount.


If you lived in Canada for 20 years

If you lived in Canada for 20 years after age 18, you would receive a payment equal to 20 divided by 40, or 50%, of the full Old Age Security pension.

Full Retirement Age Changes

Amendments in 1983 to Social Security included a provision that allowed raising the FRA beginning with people born in 1938 or later. Improvements in the overall health of older people and increased life expectancy prompted the change. The Social Security Administration provides a calculator that will tell an individual their FRA.

If you were born in 1960 or later, your FRA is 67, though you may begin claiming benefits at age 62. Those benefits, however, will be at a reduced sum , because you will receive benefits for 60 months longer. At age 65, you will get 86.7% of the full retirement benefit. If you start receiving benefits as a spouse at FRA, you will get half the monthly benefit that your spouse would receive if their benefits started at FRA.

Similarly, you can wait until after FRA to begin collecting benefits and instead collect delayed retirement credits until age 70.

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Are There Calculators To Estimate My Social Security Benefits

Here is an example. If you were born in January 1960, or later, and your full retirement age is 67. While choosing to take benefits at 62 would reduce your benefits by about 30%. Putting the maximum Social Security benefit closer to $1951 per month. For a more personalized estimate of the benefits, you could receive at various ages, visit the Social Security Administration website and use its calculator.

The site also allows you to estimate your benefits by answering a few simple questions and register for a more thorough estimate based on your actual earning history. Keep in mind this is just an estimate. Still, good to have an idea of what you Social Security income will look like.

Dont forget that should you decide to take your benefits early your cost of living adjustments will be reduced. On the flip side, if you delay taking your benefits, your cost of living adjustments will rise. It may not seem like a really big deal, but over a 30 plus year retirement those pennies might really add up. Looking for ways to maximize your Social Security will be greatly appreciated by the 90-year-old you.

How far would your standard of living drop if you tried to only live on Social Security? Living in a big city like LA, you would be hard pressed to get by even with two people receiving the maximum Social Security Benefit. Be proactive and work with a Fee Only Fiduciary Financial Planner to help ensure you can maintain your standard of living in retirement.

Your Social Security Benefits Will Be Taxed

The Maximum Social Security Benefit: Here

Most people know that you pay tax into the Social Security Trust Fund throughout your career, but did you know that you may also have to pay tax on your Social Security benefits once you start receiving them? Benefits lost their tax-free status in 1984, and the income thresholds for triggering tax on benefits haven’t been increased since then.

As a result, it doesn’t take a lot of income for your Social Security benefits to be pinched by Uncle Sam. For example, a married couple with a combined income of more than $32,000 may have to pay income tax on up to 50% of their Social Security benefits. Higher earners may have to pay income tax on up to 85% of their benefits.

You may also have to pay state income taxes on your Social Security benefits. See our list of the 13 States That Tax Social Security Benefits.

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Calculating Social Security Benefits

Like a lot of people, you would like to know your minimum social security payment at 62 or any other retirement age. Your benefits are calculated off your average wage and based on a predetermined formulation over a span of your highest 35 years of working income. Again, there will be inflation adjustments. It is also worth noting that the years you are not earning, social security will make zero entries. Remember, when you claim your benefits earlier, you end up getting less benefit amount in the long haul.

What Is The Maximum Social Security Benefit At Age 70

The numbers start to be a bit better for those who are patient and wait to claim Social Security later. At age 70, the maximum Social Security benefit is $3,790, per month, in 2020. For those who have a comprehensive retirement plan, that will provide a base income that you cannot outlive. Again, if you have earned the revenue required to get the maximum Social Security benefit at age 70, that will still not be enough for you to maintain your standard of living in retirement.

For the vast majority of Americans, when to take Social Security is a choice they get to make. However, those who wait to receive benefits will no longer have a choice once they reach age 70. Thats because 70 is the latest age at which you can start claiming benefits. Even for those fortunate enough to not need the money, they will be forced to claim Social Security at age 70.

If you are still working, claim Social Security at age 70, and use the money to top off your retirement contributions. That is an excellent problem to have. I bet a few of you are rolling your eyes, but I know quite a few people who are still working, by choice, well into their seventies, and I have a few clients who are still working in their eighties. They are fortunate to have careers they love and the health to keep working.


How To Get An Estimate Of Your Future Social Security Benefits?

Financial Clawbacks When Taking Social Security Before Full Retirement Age

Also Check: How And When To Sign Up For Social Security

Next Steps To Consider

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How Many People In The United States Have A Private Pension Or Retirement Fund

Maximum Social Security Benefits -Lesson 37

In addition to social security benefits, millions of retirees also rely on pensions or private funds liek a ROTH IRA. These funds provide additional income, which helps some as social security benefits are often described as “modest.”

In 2020, almost half of workers — 48 percent — had access to a pension or private fund. This is concerning as the Social Security Administration estimates that “By 2035, the number of Americans 65 and older will increase from approximately 56 million today to over 78 million.”

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How Social Security Works

Qualifying for Social Security in the first place requires 40 work credits or approximately 10 years of work. If you have 40 work credits, you are eligible to claim Social Security once you reach age 62. Your FRA, however, depends on the year of your birth.

For example, if you were born in 1960 or later, your FRA is 67 if you were born between 1943 and 1954, it is 66. You will receive 100% of your benefits if you wait until your FRA to claim them. If you claim earlier, you will receive less. If you claim at age 70, you get an 8% bonus for each year that you delayed claiming.

Social Security benefits are calculated by combining your 35 highest-paid years . First, all wages are indexed to account for inflation. Wages from previous years are multiplied by a factor based on the years in which each salary was earned and the year in which the claimant reaches age 60. This calculation gives an amount comparable to buying power based on the current value of the dollar. Accounting for this valuation change is important, because a salary of $14,000 was far more impressive in 1954 than it is today.

Once all wages have been indexed, the average indexed monthly earnings is computed by dividing the sum of all indexed wages by 420 . The benefit amount is then calculated based on factors that include the year in which collection begins, whether the claimant has reached FRA, and whether the claimant continues to work while collecting benefits.

Are Social Security Benefits Taxable

If you have a lot of income from other sources, up to 85% of your Social Security benefits will be considered taxable income. If the combination of your Social Security benefits and other income is below $25,000, your benefits wonât be taxed at all. The amount of your benefits that is subject to taxes is calculated on a sliding scale based on your income. Money that Social Security recipients pay in income taxes on their benefits goes back into funding Social Security and Medicare.

If your retirement income is high enough that your benefits are taxable, how do you pay those benefits? You can ask Social Security for an IRS Voluntary Withholding Request Form if youâd like the government to withhold taxes from your Social Security benefits. Otherwise, youâre expected to file quarterly tax returns to pay these taxes over the course of the year.

That covers federal income taxes. What about state income taxes? That depends. In 13 states, your Social Security benefits will be taxed as income, either in whole or in part the remaining states do not tax Social Security income.

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Avoid Social Security Tax Traps

Either 50% or 85% of your benefits can be subject to federal taxation. In 2020, income tax is imposed on 50% of your Social Security check if your combined income falls between $25,000 to $34,000 for single filers and $32,000 to $44,000 for joint filers.

For single filers with more than $34,000 in combined income and joint filers with more than $44,000, you can look forward to an income tax of 85% on your Social Security benefits. If youre looking to avoid this, try reducing your taxable income to reduce the amount of taxes. This can be achieved by looking at all of your adjusted gross income and evenly distributing your funds over the span of a few years, so there are no sudden increases or decreases.

Families Of Retired Workers And Survivors Of Deceased Workers

The Maximum Social Security Benefit for 2017

The family maximum affects all OASI families with three or more beneficiaries, but does not affect families with fewer than three beneficiaries. We estimate that about 200,000 families of retired workers and another 200,000 survivors of deceased workers have their benefits reduced by the family maximum.

Among affected families of retired workers, we estimate that median family benefits are $2,886 before applying the family maximum and $2,482 afterward, as shown in Chart 3. The median reduction among affected retired-worker families is $535 . All auxiliaries of retired workers receive at least partial benefits.

Among affected survivor beneficiary families, we estimate that median family benefits are $3,584 before applying the family maximum and $2,401 afterward, also shown in the chart. The median reduction among affected survivor families is $748 . All qualifying survivors receive at least partial benefits.

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What If I Continue Working In My 60s

Many people whose health allows them to continue working in their 60s and beyond find that staying in the workforce keeps them young and gives them a sense of purpose. If this sounds like something youâd like to do, know that working after claiming early benefits may affect the amount you receive from Social Security. Why? Because the Social Security Administration wants to spread out your earnings so you donât outlive them. If you claim Social Security benefits early and then continue working, youâll be subject to whatâs called the Retirement Earnings Test.

If youâre between age 62 and your full retirement age, and youâre claiming benefits, you need to know about the Earnings Test Exempt Amount, a threshold that changes yearly. For 2021, the Retirement Earnings Test Exempt Amount is $18,960/year . If youâre in this age group and claiming benefits, then every $2 you make above the Exempt Amount will reduce by $1 the Social Security benefits you’ll receive.

Contrary to popular belief, this money doesnât disappear. It gets credited back to you – with interest – in the form of higher future benefits. You may hear people grumbling about the Social Security âEarnings Taxâ, but itâs not really a tax. Itâs a deferment of your benefits designed to keep you from spending too much too soon. And after you hit your full retirement age, you can work to your heartâs content without any reduction in your benefits.

Wait To Claim Social Security At 70

Earning the maximum average annual wage will max out your standard benefit . But maxing out your standard benefit still won’t net you the maximum possible monthly Social Security income.

That’s because you can raise your standard benefit amount by delaying your claim for benefits past your full retirement age .

Your FRA is between 66 and 2 months and 67 depending on your birth year. You can’t claim benefits before it without seeing a reduction due to early filing penalties. And if you want the biggest benefit possible, you have to claim after it. Specifically, you need to wait until 70 because you can earn delayed retirement credits until then.

Delayed retirement credits raise the size of checks for each month you wait past FRA, ultimately boosting your standard benefit by a total of 8% annually per year of delay.

If you want the absolute largest Social Security check available, you must have earned the maximum taxable salary in at least 35 years and delayed your benefits claim to earn the maximum possible delayed retirement credits.

That’s a tall order, but if you can pull it off, it comes with a handsome payoff.

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Claiming Social Security Benefits At The Right Time Means More Money In Your Pocket Here’s A Guide To Everything From Knowing Your Full Retirement Age To Taking Social Security Spousal Benefits

For many Americans, Social Security benefits are the bedrock of retirement income. Maximizing that stream of income is critical to funding your retirement dreams.

The rules for claiming Social Security benefits can be complex, but this guide will help you wade through the details. By educating yourself about Social Security, you can ensure that you claim the maximum amount to which you are entitled.

Here are 12 essential details you need to know.

The 2021 Yearly Threshold

How To Get The Maximum Social Security Benefit

That threshold is equal to the maximum dollar amount that’s used to calculate your Social Security payroll tax. So, to get the maximum benefits, your earnings in each of those 35 years must be equal to or greater than what’s known as your Social Security wage base. That’s the maximum amount of your earnings that are subject to the Social Security tax .

The SSA posts those annual numbers here, at its web site. In 2021, for example, that number is $142,800. In 2011, it was $106,800. In 2001, it was $80,400. The taxable maximum will increase to $147,000 in 2022.

If you fell short of that number in any year, you don’t qualify for the maximum monthly Social Security benefits, Christen says.

If both you and your spouse work and are joint filers, both of your numbers must beat the threshold for each of you to qualify for the monthly max.

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How To Determine The Best Return For Your Spouse/domestic Partner

Married couples have two ways to receive Social Security benefits. A person can claim benefits based on his or her own earnings, or delay claiming them and take half of the partners payout instead. To be eligible, a marriage must be a minimum of 10 years old, but the relationship need not be current.

Generally, the higher earner should delay claiming benefits based on his or her record. But if that person worked for fewer years and has zeroes on his or her record, youll want to compare how much your Social Security checks will be at FRA to decide. If your check is bigger, it makes sense for you to claim your spousal benefit and delay filing for the benefit based on your earnings until youre 70 . When you turn 70, then, you would file for your benefit. If your check is more than twice as big as your spouses benefit, he or she should now file for the spousal benefit.

Another advantage of this strategy: should the bigger earner die first, the widow or widower would receive the larger benefit.

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