Whether you understand it or not, social security is our nation's most important social program. Out of the 63 million benefit controls distributed each month, over 22 million are responsible for raising people above federal poverty levels, which in 2019 is $ 12,490 in an individual's earned income. This opportunity to provide a financial foundation is most prevalent among senior citizens, where the estimated poverty rate will be north of 40% if the program did not exist, according to a Center for Budget and Political Priority Analysis.
However, Social Security is also a program that we tend to lean too heavily on. Although it is only intended to replace about 40% of the average employee's salary under retirement, 62% of current retirement seniors are at least half of their monthly income, while 34% rely on social security schemes that are essentially their sole source of income.
With that said, there is no decision that gives greater importance to the elderly than to decide when to take their benefits.
As a quick update, the Social Security Administration (SSA) has a formula that it uses to determine your monthly payout. This formula takes into account four main factors.
The first two factors – your work history and income history – are linked to the hip. With the SSA using the 35 highest earned inflation-adjusted years when calculating your benefit at full retirement age, it means you want to work for at least 35 years, as well as earn as much as you can in the years you work – up to the maximum taxable payroll – If you want a shot when you maximize your payout. Each year, less than 35 work will result in $ 0 being averaged over your total bill, which will reduce your potential payout.
The third factor is the year of birth, which helps you determine your full retirement age. This is the age at which SSA considers you eligible to collect 100% of your monthly benefit. Claiming at any time before this age means that you accept a permanent reduction to your benefit while waiting until you have full retirement age, it can result in a permanent monthly bonus.
The fourth and final factor is your alleged age, which can undoubtedly have the greatest impact on what you will be paid each month. Pension workers can start at 62 or later. However, it is a pretty big "bonus" if you decide to be patient.
For every year you love, your benefit will grow by about 8% to 70 years. This means that all things are equal (ie work and earnings history and year of birth), someone who claims to be 70 years net can be 76% more per month than anyone who claims to be 62 years old.
The most important social security table you will ever see
For those of you who are more visual teachers, I will introduce you to what may well be the most important social security table you will ever see. It is a set-up that describes what you will receive from the Social Security program based on the year of birth and the age requirement.
For people born between 1943 and 1954, your full retirement age is 66 years. For those born in 1960 or later, it is 67 years. For those of you born between 1955 and 1959, the full retirement age increases by two months per year. For people born in 1955, it is 66 years and two months, for 1956 it is 66 years and four months, and so on until it is attached for 67 years for those born in 1960 or later.
Once you know the full retirement age, you can use the following table to really understand the dynamics of your payout.
|Year of Birth||Age 62||Age 63||Age 64||Age 65||Age 66||] Age 67||Age 68||Age 69||Age 70 1943-1954 75% 80% 86.7% 93.3% 100% 108% 116%||116%||[%] 19%||124% [132%] 1955 [74.2%] 79.2% [85.6%] 92.2% 98.9%  106 , 7% [114.7%] 121.7% [130.7%] [73.3%] 78.3% [84.6%] 84.4% [911%978%1053%1133%1213%1293%|
|1957||5% [77.5%] 83.3% 90% 96.7% 104% 112% [%] 120%||128%||] 1958 71.7% 76.7% 82.2% 88.9% 95.6% 102.7%||101.7%||% 118.7%  6.7%  70.8% [75.8%] 81.1% 87.8% [94.4%] 101.3% [%] 109.3% [117.3%] 125.3%  or later [70%] 75% [80%] [%] 86.7% [ ] 93.3% [100%] 108% [116%] 124%|
Let's look at a few examples, but we first need a baseline. As of January 2019, average retirement benefits for retirees were $ 1,464 per month. Just for your convenience, let's just pretend this is what you will get per month at full retirement age.
First, we have a baby boomer born in 1954 who decides when to take advantage of it. Waiting until full retirement age (66), this person would just get a full payout of $ 1464 a month.
But let's say that they are not in the best of health and decide that the 63-year-old makes sense as a age-old man. At age 63, the table shows that anyone born between 1943 and 1954 will receive 80% of their full pension benefit monthly. Thus, 80% of $ 1,464 is $ 1,171.20 per month. The deviation here is that this person must accept a monthly reduction in the life of his 20% payout, but will receive payments starting years earlier than those who choose to wait.
What about a millennium that is going to retire three decades from now and is therefore part of the "born in 1960 or later" audience? The table above shows that the millenniums have to wait for 67 years to collect the entire $ 1,464 a month, or a whole year longer than many of the early infants. Of course, if they are really waiting for things and claim they are 70 years old, they will get a 24% bonus every month, or $ 1,815.36.