Individuals qualify for Social Security benefits after they work ten years to earn 40 work credits. The maximum retirement benefit that a retiree can receive depends on the age at which they begin collecting benefits and their earnings history, among other factors.

In 2024, the maximum monthly benefit is $3,822 for someone who files at full retirement age (FRA), which is age 66. The maximum benefit for those who qualify and delay claiming until age 70 is $4,873.

The Social Security Administration's cost of living benefit increase for 2025 is 2.5%.

How Social Security Benefits Are Figured

• Your 澳洲幸运5官方开奖结果体彩网:Social Security benefit amount is calculated using factors that include the year when collection begins, FRA, and whether an individual will 澳洲幸运5官方开奖结果体彩网:continue to work while collecting benefits.
• Further, Social Security benefits are derived by combining an individual's 35 highest-paid years. All wages are indexed to account for 澳洲幸运5官方开奖结果体彩网:inflation.
• Wages from previous years are multiplied by a factor based on the years in which they were earned. This calculation provides an amount comparable to 澳洲幸运5官方开奖结果体彩网:buying power based on the U.S. dollar's current value.
• Once all wages are indexed, an 澳洲幸ꦗ运ඣ5官方开奖结果体彩网:average indexed monthly earnings (AIME) amount is computed by dividing the sum of all indexed wages by 420 (35 years expressed as months). A zero is entered for years when an individual did not work.

If you have 40 work credits, you can claim Social Security as early as age 62, but waiting until FRA will result in a much higher benefit. The most that individuals can receive in 2024 at age 62 is $2,710.

More About FRA

Your FRA 澳洲幸运5官方开奖结果体彩网:depends on your year of birth. The FRA is 66 for people born between 1943 and 1954. Retirees receive 100% of benefits if they wait until FRA to claim them. Individuals who wait the extra four years until 70 to file a claim for benefits receive 132% of their monthly benefit. The FRA changes to 67 for people born in 1960 or later.

Claiming the Maximum Benefit

Retirees must earn Social Security’s maximum taxable income for 35 years to receive the highest benefit. The cap, which is the total amount of earnings subject to 澳洲幸运5官方开奖结果体彩网:Social Security tax, is $168,600 in 2024.

So, to receive potentially $4,873 per month, individuals must:

• Be high earners over many decades
  
• Earn at least the maximum wage taxable by Social Security over 35 years and contribute the maximum amount
• Elect to start receiving Social Security benefits at age 70
  

The maximum taxable income amount is adjusted annually based on the national average wage index.

Timing Aspects

In 2024, an individual retiring at 66 years and ten months will receive FRA benefits. If they opt to receive benefits at age 62, their monthly benefit will be reduced to account for the longer time that they could receive benefits, according to the 澳洲幸运5官方🐻开奖结果体彩网:Social Security Administration (﷽SSA).

That decrease is usually permanent. If the same person waits for benefits until age 70, their monthly benefit increases. The larger amount is due to the delayed retirement credits earned by postponing benefits past FRA.

The 澳洲幸运5官方开奖结果体彩网:best time to start taking benefit🎶s depends on your current income and employment status, other available retirement funds, and life expectancy🌜.

Average Monthly Payment

The average Social Security retirement benefit is significantly lower than the maximum. It was $1,915.26 per month in April 2024, according to the SSA.

To ensure that benefits maintain their buying power, the SSA adjusts them according to changes in the cost of living. For example, the cost-of-living adjustment (COLA) is 2.5% for 2025.

The Bottom Line

Social Security benefits are a form of retirement income. They're meant to replace only a portion of your pre-retirement earnings.

The monthly benefit that you will receive is based on the total amount of money you earn during your time in the workforce. You can start receiving benefits as early as age 62, albeit at a lower monthly amount. You can increase your benefit payment by not filing for benefits until age 70, which is the age at which the monthly benefit amount is capped.