The Best Age To Set Up Your Social Security To Ensure The Most Benefits

The small portion of tax withheld for Social Security on the very first pay stub you receive is the first indication that thinking about retirement is a long term feature of modern life and not something to be taken for granted. As you continue to progress through your working years, you'll perhaps start contributing to a Roth IRA or other retirement account to lock in solid tax-advantaged investments.

But one aspect of retirement is near-universal in its coverage. People working in America contribute to the Social Security program while they are in their working years, and then receive a retirement income payment from the Social Security Administration after they retire. The specifics of how Social Security functions aren't always clear, especially to those who haven't spent much time evaluating how much they'll actually receive from the program (and why). Retirees can expect to see roughly 40% of their pre-retirement income paid out in Social Security benefits, although plenty of features can add or subtract from this generality. More pressingly, political attitudes in Washington toward its future may expand or hinder its capabilities to provide (see: Watchdog group reports on the impact Trump's tax plan). All this comes together to create a necessity to understand your Social Security record and the benefits you stand to receive. But when should you get serious about setting up an account and really drilling down on this component of your retirement picture?

Broadly speaking, people envisioning retirement for themselves will want to set up a Social Security account by the time they're in their 50s. These years are close enough to retirement to provide a clear picture of what may be in store, and long enough out from that transition to make changes if necessary. When you turn 50, you'll be able to contribute additional "catch up" funding to your tax-advantaged retirement accounts, for example.

Creating an account at the Social Security Administration's website will give you access to your tax record — although you'll need to wait for SSA to mail you a verification passcode to protect your information and account before it's completely ready to go. This is a complete history of your earnings and tax contributions throughout the years and is the definitive dataset that will be used to calculate your Social Security benefit amount. Here, you can explore what an early draw at 62 will yield, as well as the payout figure associated with a later start to your benefits. You'll also be able to compare your own records to those held by the government. If there's a discrepancy, the more time you give yourself to fix it the better. Similarly, you'll have as many as 20 years standing between your 50^th birthday and the latest you might wait to start taking benefits. That's plenty of time to make changes to your income picture and boost your Social Security benefit amount. Your 50s offer a solid middle ground that's late enough to achieve firm clarity and still early enough to make changes.

While it's crucial to start thinking more firmly about your retirement plans as you get older, an earlier start to some of the more strategic planning may be a good idea. Your 30s is a decent place to begin really clarifying your Social Security picture, and for a number of reasons. Even though there are plenty of working years still remaining between your 30^th birthday and your earliest draw age (62 as of now), this can actually be a huge asset. Social Security benefits are calculated based on your 35 highest earning years. For someone considering working until they reach full retirement age at 67, there are crucially 37 working years separating a 30-year-old from this mark. Moreover, if you started working as a teenager in any capacity, there's a good chance that you'll have cleared the 40 credit hurdle needed to become eligible to receive Social Security benefits by 30 (or within a few years for later starts).

This makes "30-ish" a unique sweet spot in the planning phase of your retirement strategy. There are enough years left between the present and your retired future to make a huge impact, and you'll have most likely fulfilled the requirement to receive benefits, giving you a fuller picture of your entitlements. Another important feature is your survivors' benefits and disability entitlements. At this age, you may have started a family and want to understand exactly what you'd leave behind (in coordination with other backstops like life insurance) or explore what an injury leaving you out of work might mean financially.