With the baby boomer generation reaching retirement age there are a lot of studies being done with regard to how prepared people are for their post-work years. A recent Associated Press-LifeGoesStrong.com poll indicates that 64% of baby boomers who will be retiring in the coming years will be counting on Social Security as the foundation of their retirement. Some 44% of respondents stated that they are more or less certain that they will not feel comfortable financially once they retire. Of course on the flip side 55% of people indicated that they are indeed confident they will enjoy a financially secure retirement, but many of them will be relying on Social Security to provide the cornerstone.

If the Social Security benefits that you will receive do indeed play a big role in your retirement planning efforts, you may well want to do everything possible to maximize your benefit. A good way to make the most of your Social Security eligibility is to work a few years beyond your full retirement age, and this is something that you may want to keep under consideration as you are planning your retirement.

There are two ways that working past your full retirement age can increase the amount of the benefit that you ultimately receive when you do apply for Social Security. For one, you can earn delayed retirement credits that increase your benefit by 8% per year that you work past your full retirement age up to the age of 70.

In addition, the amount of your Social Security benefit is determined based on your 35 highest earning years. So, let’s say you work three years beyond your full retirement age and make $50,000 a year. If you earned $25,000 a year during your three lowest earning years prior to this, they would be replaced by the $50,000 earning years and your benefit would be enhanced when you did retire.

Larry Parman
Founding Attorney