What Is the Average Social Security Benefit at Age 62 in 2024
The maximum benefit is determined by the age at which you retire. For example, if you reach full retirement age in 2024, your maximum benefit is $3,345. If you retire at the age of 62 in 2022, your maximum benefit would be $2,364. If you retire at the age of 70 in 2024, your maximum benefit is $4,194.
How Are Social Security Benefits Calculated?
To qualify for Social Security in the first place, you must have 40 work credits or nearly 10 years of experience. To be eligible for the full payment, you must have earned the maximum earned a profit for Social Security for 35 years. The earnings limit subject to Social Security tax is $147,000 in 2022, up from $142,800 in 2021.
Social Security benefits are computed by adding your 35 highest-paid years together (if you worked for more than 35 years). To begin, all earnings are geared toward inflation. Wages earned in prior years are multiplied by a number based on the years earned. Given the current value of the dollar, this computation yields a quantity comparable to purchasing power.
Accounting for this shift in valuation is vital since an income of $14,000 in 1954 was significantly more outstanding than it is today.
After all, wages have indeed been indexed, you can calculate your average adjusted monthly earnings (AIME) by dividing the total of all indexed wages by 420. (35 years expressed as months). If you worked for less than 35 years, the years you did not work are denoted by a zero. The excellent advantages are then computed depending on parameters such as the year you begin collecting benefits, whether you have attained FRA, and if you remain employed while receiving benefits.
If you have 40 work credits, you can collect Social Security as early as age 62, but you would receive a significantly larger payment if you wait until FRA. The maximum amount you can get in 2022 if you begin collecting at the age of 62 is $2,364.
Your FRA depends on the year of your birth. For instance, if you are born in 1960 or later, your FRA is 67, however, if you were born between 1943 and 1954, your FRA is 66.
If you wait till your FRA to claim your benefits, you will get 100% of them. If you claim at 70 instead of FRA, you gain an 8% bonus for every year you wait.
Highest Social Security Benefits Example
Assume that someone who turns 62 in 2021 will attain FRA at 66 years and 10 months, assuming earnings that qualify them for a $1,000 monthly benefit at that age. According to the Social Security Administration, receiving benefits at age 62 reduces their monthly amount by 29.2%, to $708, to account for the long time they may receive benefits (SSA). This reduction is usually permanent.
If the same person waits until the age of 70 to apply for benefits, their monthly payout will climb to $1,253. The higher sum reflects the postponed retirement credits received as a result of the decision to delay taking benefits past FRA.
In this case, the higher payment at age 70 is almost 77% greater than the benefit they would get each month if benefits began at age 62—a gap of $545 per month.
Of course, the ideal timing for someone to begin receiving Social Security payments is determined by a number of criteria other than the cash amount of the benefit. Present employment and income status, other potential retirement money, and life expectancy must all be considered in the selection.