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Stop Guessing: Here's Exactly How to Maximize Your Social Security

By Christy Bieber – Sep 30, 2021 at 8:08AM

Key Points

  • Social Security benefits are based on average earnings throughout your career.
  • The age when you claim benefits affects the amount of your checks, too.
  • You'll need to work for a long enough time to maximize your benefits.

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Want the largest Social Security checks possible? Take these steps now.

Want the biggest Social Security checks possible? Figuring out how to get them can be confusing because there are many different factors affecting the amount of your benefits.

The good news is, there are really only two crucial steps you need to take if you want to max out your monthly Social Security income. Here's what they are. 

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Image source: Getty Images.

1. Earn the highest AIME you can

Social Security benefits are based on a simple formula. Your primary benefit is equal to:

  • 90% of average indexed monthly earnings (AIME) up to first "bend point";
  • 32% of AIME between a first and second bend point; and
  • 15% of AIME above a third bend point.

The bend points are income thresholds, and the specific amount applicable to you is based on when you turn 62. For example, you might get 90% of AIME up to $996 in income; 32% of AIME between $996 and $6,002; and 15% of AIME above $6,002. 

Obviously, the higher your AIME, the higher your benefit. But how can you earn a high AIME? Simple -- you need to earn as much money as you can and work for at least 35 years. That's because your AIME equals the monthly average of your wages in the 35 years when you earned the most (after those wages are adjusted for inflation). 

If you maximize your earnings, your AIME will be based off a higher wage. And if you work for at least 35 years, you won't have any years of zero earnings factored in. Working for longer if you're earning more later could also result in a higher AIME because some lower-earning years would no longer count in your AIME calculation. 

2. Claim benefits at 70

The formula above tells you what your primary benefit amount would be. If you want to receive benefits equaling the exact amount determined using this formula, you must claim benefits at full retirement age (FRA). That's between 66 and two months and 67 depending on birth year.

If you start getting checks even a month before FRA, the amount of your benefit is reduced by monthly early filing penalties. You could shrink benefits by as much as 30% if you start checks at 62 with an FRA of 67, as penalties can add up quickly. 

If your goal isn't just to avoid cuts, but to actually increase your primary benefit and get the largest check possible, waiting until FRA isn't enough. You must wait even longer because each month you forgo benefits results in a delayed retirement credit that raises your check amount. Delayed retirement credits could increase your benefits up until age 70, when you can't earn them anymore. They result in an 8% annual bump in benefits. 

By earning as much as you can and delaying the start of your checks as long as you can, your Social Security benefit will be as large as possible. This may take sacrifice, such as working extra hours or putting off retirement. But if you're worried about having enough money to live on in your later years, your efforts can pay off. 

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