Saving for retirement isn’t easy, and Social Security can go a long way toward bridging the gap between what you have saved and what you need to retire comfortably.
The average retiree collects just under $1,700 per month in benefits, according to the Social Security Administration. That amounts to roughly $20,000 per year.
However, the maximum you can collect in benefits is $4,194 per month — or $50,328 per year. While few workers will be able to meet all the requirements for the max benefit amount, there’s no harm in trying to get as close as you can. Here’s what you’ll need to do.
1. Work at least 35 years
Your basic benefit amount — or the amount you’ll receive if you file at your full retirement age (FRA) — is calculated by taking an average of your wages over the 35 highest-earning years of your career, then adjusting that number for inflation.
If you haven’t worked 35 years, you’ll have zeros added to your earnings average. That, in turn, will result in a lower benefit amount. To earn the maximum $50,328 per year, then, you’ll need to work at least 35 full years before you begin claiming benefits.
2. Delay claiming benefits
If you file for Social Security at your FRA, you’ll receive the full amount you’re entitled to based on your work record. Depending on the year you were born, your FRA is either age 66, 67, or somewhere in between.
To receive as much as possible in benefits, though, you’ll need to wait until age 70 to file. In fact, even if you meet all of the other requirements to receive the max benefit, if you were to file at, say, age 67, the most you’d collect is $3,568 per month — roughly $600 less than the maximum payments.
3. Consistently reach the earnings limit
The maximum taxable earnings limit is the highest income subject to Social Security taxes. The closer your income is to this limit, the higher your benefit amount will be.
This limit changes year to year to account for adjustments in inflation, but in 2022, it’s $147,000 per year. For context, 35 years ago in 1987, the maximum taxable earnings limit was $43,800 per year.
To earn the maximum $50,328 per year in benefits, you’ll need to consistently reach these income limits throughout your career.
What if you’re off track?
While there’s no harm in aiming for the max benefit amount, in reality, few workers will be able to achieve it. However, that doesn’t mean you can’t use these tactics to increase your benefits as much as possible.
For example, maybe you can’t delay Social Security until age 70, but you can wait until, say, age 65. Even if that’s the only move you make, that alone could still boost your payments by hundreds of dollars per month.
Perhaps you can’t reach the maximum taxable earnings limit, but you can increase your income slightly. Or maybe you can’t increase your income at all, but you are able to work 35 years before you file. Any one of these strategies can boost your benefits and get you closer to the maximum payments.
Achieving the highest possible Social Security benefit may be out of reach for many workers, but that’s OK. With the right strategy, you can score larger monthly payments and head into retirement more prepared.
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