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Age and career length

Your age and the length of your career are a factor in determining your Social Security benefit. To achieve the maximum monthly payout, you need to have made sufficient contributions to the program over time via payroll tax.

The Social Security Administration (SSA) calculates your benefits based on your 35 highest years of earnings. Earnings are indexed to account for changes in wage levels. If your career is shorter than 35 years, you will fall short of maximum eligibility.

Age is another factor. For example, if you were born in 1960 or later and begin claiming Social Security at age 62, the earliest age of eligibility, your benefit would be 30% lower than if you retired at 67, the full retirement age. However, the benefit increases by a certain percentage each month you delay accepting it beyond full retirement age up until age 70.

Just a few extra years of working can make a big difference.

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Social Security is funded through a federal payroll tax, which requires you to pay 6.2% of your wages. Your employer is required to separately pay the same percentage on the same earnings. If you’re self-employed, you need to cover both sides and pay 12.4%.

These tax requirements only apply to a limited portion of annual earnings, known as the benefit base, which is periodically adjusted according to overall wage changes throughout the U.S. workforce. The benefit base currently sits at $168,600.

This six-digit figure is the key reason why maximizing Social Security benefits is so difficult. To hit the full amount of monthly payments, you need to earn the benefit base or more for 35 years and retire at the age of 70. In other words, you need to be a high-income earner for the vast majority of your career.


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Vishesh Raisinghani Freelance Writer

Vishesh Raisinghani is a freelance contributor at MoneyWise. He has been writing about financial markets and economics since 2014 - having covered family offices, private equity, real estate, cryptocurrencies, and tech stocks over that period. His work has appeared in Seeking Alpha, Motley Fool Canada, Motley Fool UK, Mergers & Acquisitions, National Post, Financial Post, and Yahoo Canada.


The content provided on Moneywise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.