Nearly 70 million people in the U.S. receive Social Security benefits. But very few qualify for Social Security's maximum benefit. In 2021, the maximum monthly check is $3,895, or $46,740 a year. But due to soaring inflation, the maximum benefit will rise to $4,194 a month in 2022, or $50,328 annually, a 5.9% increase.
However, a typical retired worker receives less than half of the maximum Social Security check. The average monthly retirement benefit was just $1,559 in September 2021.
Wondering whether your future Social Security check will be anywhere close to the maximum? Sorry, but there are no easy hacks. Here are the three things you'll need to do to get there.
Work for at least 35 years
Your Social Security benefit is based on your 35 highest years of earnings, so the first thing you need to do to collect the maximum benefit is to work for at least 35 years. If you only work 25 years, the other 10 years will be entered as zeroes when Social Security calculates your average earnings. Falling short of the 35-year mark -- even by just a year -- will prevent you from collecting the maximum benefit, no matter how much you earned during the other 34 years.
Be a high earner for at least 35 years
Simply working 35 years isn't enough if you want the biggest monthly checks. Your earnings need to equal or exceed Social Security's maximum taxable income for each of those 35 years.
That figure is adjusted each year to reflect changing wages. In 2021, the maximum taxable income is $142,800. It will increase to $147,000 in 2022. Earning enough to exceed the maximum taxable income for at least 35 years is by far the toughest requirement for getting Social Security's maximum benefit. Only about 6% of workers will earn this much in any given year.
Maximum Social Security benefit by age in 2022
|Age when benefits begin||Maximum benefit in 2022|
Wait until you're 70
You're allowed to take Social Security retirement benefits as early as age 62. If you're getting surviving spouse benefits, you only need to wait until you're 60, or age 50 if you're disabled. But if you don't wait until you're 70 to collect, you won't receive the maximum check each month.
Your Social Security benefit is based on your primary insurance amount, which is the amount you'll qualify for at full retirement age. Claiming as soon as you're eligible at 62 reduces your benefits by as much as 30%.
But for every year you delay past your full retirement age, you'll earn delayed retirement credits of 8%. To get the most out of Social Security, you'll need to rack up all of those delayed retirement credits. They'll stop accruing once you reach age 70, though, so once you're a septuagenarian, there's no point in waiting any longer.
As you can see in the table above, the difference between claiming at age 62 vs. age 70 is substantial. Waiting until you're 70 yields a benefit that's 77% higher.
Should you count on the maximum Social Security benefit?
Getting the biggest monthly check out of Social Security is a fine goal. But even if you have a high income, you shouldn't rely on getting the maximum benefit.
Even having a year or two when your earnings fall short can reduce your payments. Also, many seniors have to leave the workforce earlier than they anticipated. Health problems, layoffs, age discrimination, and caregiving responsibilities often disrupt plans to keep working. In any of these situations, holding out until 70 may not be realistic.
Waiting to start benefits can certainly pay off-- but it's essential that you start saving for retirement early and continue to do so throughout your career. Retirement will be much easier if you're not counting on squeezing every last penny out of Social Security.