The best way to plan now for the highest future Social Security benefit is to delay collecting benefits until full retirement age or later. Because Social Security benefits are calculated by factoring in the 35 working years with highest income, working longer often increases future monthly benefits.
Full retirement age is 65 for those born in 1937 or earlier, 66 for those born from 1943 to 1954, 67 for those born after 1959, and in between these years, the value changes in increments of months. Although early retirees can collect Social Security benefits at age 62, they receive only a portion of benefits due to them at full retirement age. If they continue to work beyond full retirement age, they continue to receive delayed retirement credits that increase benefit amounts until they turn 70. For instance, someone receiving $1,000 at the full retirement age of 66 would receive 25 percent less, or $750, when taking early retirement at 62. If the individual waits to retire until age 70, he would receive 132 percent of the full retirement age benefit.
Because Social Security uses the top 35 working years to calculate benefits, those who have some years with little or no income due to child raising, care-giving to aging parents or other factors increase their benefits by returning to the work force and remaining as long as possible. If someone has worked less than 35 years, even part time work increases the overall average.