Social Security bases benefit calculations on your lifetime of work. Until 2011, Social Security provided a statement of benefits so workers could see a projected monthly benefit at early retirement, full retirement age and at age 70. As a cost-cutting measure, the Social Security Administration discontinued the statement, but workers can use the estimators available on the Social Security website. If you are retirement age, you can obtain calculations from your local Social Security office.
Maximum Monthly Benefit
Social Security bases the maximum monthly benefit calculation on 35 years of employment at the contributions base limit. In 2011, the contributions base is $106,800. If you have earned the taxable limit or above for 35 years of employment, your primary insurance amount in 2011 could be $2,366 a month at full retirement age. Full retirement age is 66 for individuals born from 1943 to 1954. The maximum monthly benefit in 2010 was $2,346, so it has edged up slightly in a year.
Increasing Your Benefit
Full retirement age benefits are 100 percent of calculations. A worker retiring at age 62 receives 70 to 75 percent of full retirement age benefits. A worker retiring at age 70 receives 130 percent of full retirement age benefits. You can increase benefits by continuing to work to age 70. Social Security adds to your benefit if you have high-income years, even if those years are after your full retirement age. A 30-percent increase in your benefit by waiting until age 70 represents about $700 a month for you, making the Social Security retirement benefit more than $3,000 a month for the worker making the maximum contributions base income for 35 years.
Your spouse can receive 50 percent of your benefit at full retirement age. If you receive the maximum benefit at $2,366 for 2011, your spouse receives about $1,183, making the total monthly benefit about $3,500 for you as a couple. You can claim your retirement benefits at full retirement age and suspend them if your spouse wants to collect benefits and you want to wait until age 70.
When to Retire
Social Security reports that whether you retire early and receive low benefits for a long time or retire late and receive higher benefits for a shorter time, overall benefits are about the same. The decision is personal, depending on your lifestyle, your other income and your retirement preparation. Social Security provides about half of your retirement income needs. If you retire early and die, your survivors receive benefits based on your early retirement benefits, not full retirement age benefits. This is a consideration for individuals who are the primary wage earners for the family.