There are times when you come across a statistic that really turns your head around, and you can do a double take and question whether or not you actually read it right. One of these is circulating right now with regard to the rapid aging of the population. At the present time there are no less than 10,000 people applying for Social Security each day for the first time due to the fact that the baby boomer generation is reaching retirement age. This in itself is a rather eye-opening statistic, but the thing that puts it over-the-top is the fact that this volume of applicants is expected to continue lining up at the Social Security office every day for the next 20 years.
Unfortunately, many baby boomers are not prepared financially. A recent AP-LifeGoesStrong.com poll indicates that 44% of the baby boomers who were interviewed are not confident that they will have the financial resources that they need during their retirement years. Considering this, many people are going to want to do everything possible to get the most out of their Social Security benefit, so let’s take a look at the possibilities.
Full retirement age for Social Security purposes varies depending on the year during which you were born. For those born between 1943 in 1954 full retirement age is 66, and it then goes up by two months per year until 1960. For those born in 1960 and after full retirement age in the eyes of the Social Security Administration is 67.
However, you can maximize your Social Security benefit by working beyond your full retirement age up to the age of 70. Your benefit goes up by 8% per year that you work past your full retirement age. So delaying your retirement is a way to increase your benefit on this level, but it can also help in another way. The 35 years during which you earned the highest wages are used to calculate your benefit. If you were to work for three years beyond your full retirement age at a rate of pay higher than what you were making during any three of the years that would have been used to calculate your potential benefit your actual benefit would rise as a result.
John Kuhn, Estate Planning Attorney
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