What is the maximum I can get if I claim at 65? – The Motley Fool

It used to be that Americans retired at age 65 because that's when they qualified for 100% of their monthly Social Security benefits. Today, workers have to wait longer to reach full retirement age, but old habits become difficult and retirement at 65 is still common. If you are among those who still aim to retire at age 65, this is what you should know to not charge less in Social Security than you expect.

Why your age is important

Social Security benefits are determined by a formula that averages the highest 35 years of income adjusted for inflation to obtain your average indexed monthly amount (AIME). Once your AIME is determined, the amount is reduced by specific income thresholds called inflection points to obtain your primary insurance amount (PIA).

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Your PIA is the amount of money you can get from Social Security at your full retirement age. As I mentioned, the full retirement age used to be 65, but if you were born after 1937, you are over 65. If you were born between 1943 and 1954, you are 66 years old, and if you were born after 1955, it ranges from 66 years and two months to 67 years, depending on the year of your birth. For example, the full retirement age for anyone born in 1960 or later is 67 years.

If you retire at your full retirement age, you will receive 100% of your PIA. However, if you claim advanced or late, your benefit will be smaller or larger than your PIA, respectively. The exact amount, smaller or larger, depends on how many months you claim early or delay the claim.

If you claim benefits with 36 months or less in advance, your benefit is reduced by 5/9 of 1% for each month. If you claim more than 36 months before, your benefit is further reduced by 5/12 of 1% per month for each of those additional months. For example, if your full retirement age is 67 and you claim at the age of 65, your benefit would be reduced by approximately 13.3%.

Age benefit 65, as a percentage of IAP:

Year of birth Complete retirement Age Age 65
1943-54 66 93 1/3
1955 66, 2 months 92 2/9
1956 66, 4 months 91 1/9
1957 66, 6 months 90 [19659016] 1958 66, 8 months 88 8/9
1959 66, 10 months 87 7/9
1960 and later 67 86 2 / 3

Data source: Social Security Administration.

Alternatively, if you delay claiming Social Security, then your benefit increases due to delayed retirement credits. These credits increase your payment by 2/3 of 1% for each month you delay, up to 70 years. If you were born after 1943, the credits would increase your Social Security check by 8% for each year you wait. So, if your full retirement age is 67, you will get 124% of your PIA if you wait until age 70 to begin collecting Social Security.

Year of birth Complete retirement age Percentage paid if claiming at 66 Percentage paid if claimed at 67 Percentage paid if claimed at 70
1943-54 ] 66 100% 108% 132%
1955 [19659014] 66, 2 months 98 8/9%
106 2 / 3%
130 2/3%
1956 66, 4 months 97 7/9%
105 1/3%
129 1/3%
1957 66, 6 months 96 2/3%
104% 128%
1958 66, 8 months 95 5/9%
102 2/3%
126 2/3%
1959 [19659] 014] 66, 10 months 94 4/9%
101 1/3%
125 1/3%
1960 and later 67 93 1/3%
100% 124%

Data source : Social Security Administration.

Maximum Social Security at age 65

We have already established this because Social Security reduces benefits when you make an advance claim and the full retirement age for anyone born after 1943 is at least 66 years old , you will get a reduced benefit check if you start meeting 65 years old.

You should also know that Social Security rules effectively limit the amount you can receive from Social Security benefits, regardless of your income.

Social Security pays benefits to current beneficiaries with the payroll taxes it collects on current workers, but those payroll taxes only apply up to a maximum amount of taxable profits each year. In 2018, the limit of taxable profits is $ 128,400, and since earnings above that amount are not taxed, you will not get credit for them when Social Security calculates the total payment of your retirement age with your work history.

In 2018, it is above the maximum taxable limit and claims benefits at age 65, then the maximum it can receive from Social Security is $ 2,589 per month.

Maximum social security if he retires in 2018:

Age Per Month Per year
62 $ 2,158 $ 25,896
65 $ 2,589 [19659086] $ 31,068
70 $ 3,698 $ 44,376


A great decision

If you wait until age 70 to begin receiving Social Security, you will get significantly more money per month than if you claim it at age 65, but waiting to claim is not the right move for everyone. For example, the decision to wait until age 70 will not reach the limit to claim mid-60s in terms of total lifetime benefits until you are in your first 80 years. The average life expectancy of someone who turns 65 is around 80, but there is no guarantee that he will live that long.

However, health is only one thing to consider when deciding when to retire. You should also consider your retirement goals, sources of retirement income, expenses and plans for your spouse after your absence. In short, there is no ideal age to retire. On the other hand, retiring at 65 or any other age will depend on your personal situation.

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