Top Strategies for Maximizing Social Security for Gen X and Millennials

As many people from Generation X and Millennials think about retirement, they might wonder if they’ve earned enough Social Security credits. To get retirement benefits at age 62, you usually need at least 40 credits, which is about 10 years of work. But how does this apply to Gen X and Millennials? Let’s find out!

Generational Eligibility

Generation X, born between 1966 and 1980, and Millennials, born between 1981 and 1995, have mostly been working for a long time. By 2024, even the youngest Millennials will have had more than ten years to earn Social Security credits, as long as they’ve worked in jobs covered by Social Security taxes.

Earning Credits

You can earn up to four Social Security credits each year if you work in a job covered by Social Security. In 2024, you get one credit for every $1,640 you earn. So, with $6,560 in earnings, you can get the maximum of four credits per year.

This means that Gen X and Millennials who have been working steadily and paying Social Security taxes are likely to have earned the 40 credits they need.

Maximizing Social Security Benefits

Just earning the 40 credits isn’t enough to get the most out of Social Security. If you want to maximize your benefits, consider these strategies:

Ensure Coverage by Social Security

Make sure your jobs are covered by Social Security. Most jobs are, but some government or nonprofit jobs might not be. Check that your earnings are reported correctly so your benefits are calculated right.

Delay Retirement

Although you can start getting benefits at 62, waiting can increase your monthly benefits. If you wait until your full retirement age (66-67 for Gen X and Millennials) or even until age 70, you get more because of delayed retirement credits. This helps you keep up with inflation.

Work for 35 Years

Social Security calculates your benefits based on your highest 35 years of earnings. If you work less than 35 years, the missing years count as zeros, which lowers your average earnings and benefits. Aim to work for at least 35 years to replace low-earning years with higher-earning ones.

Maximize Earnings

The more you earn (up to the taxable maximum, which is $160,200 in 2024), the higher your benefits. Try to get higher-paying jobs, negotiate better salaries, and take roles that boost your career.

Example: Maximizing Benefits

Here’s an example: If a worker earns the maximum amount subject to Social Security tax for 35 years, they could get a maximum monthly benefit of $4,873 if they wait until age 70 to start claiming. This is much higher than if they claim earlier because early retirement reduces benefits.

For those who don’t meet these criteria, there are other support options like Supplemental Security Income (SSI) and programs like SNAP (Supplemental Nutrition Assistance Program) that can help provide financial assistance.

Most Gen X and Millennials who have worked for a decade or more likely have enough credits to qualify for Social Security retirement benefits. But to get the most out of these benefits, you need to plan carefully.

Ensure you have consistent work, consider delaying retirement, and maximize your earnings. Being proactive in these areas can greatly impact your financial stability during retirement.

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