The amount you'll ultimately receive in monthly retirement benefits depends on a few key factors. The difference between the average monthly benefit if you retire at 62 -- the earliest age you can take Social Security -- and the benefit if you retire at age 70 amounts to $1,830, so it makes sense to know exactly how to maximize your entitlement. An extra $21,960 per year can obviously go a long way!
Here are three key actions that can help drive up your Social Security checks.
1. Delay filing for benefits
Sometimes it's about what you don't do that matters. By simply waiting to file for benefits beyond age 62, and even past age 67 (full retirement age), you'll set yourself up for a much larger check for the rest of your life.
By waiting, you'll have foregone checks for the eight years during which you could have claimed benefits, but didn't. The reward for this is a significantly higher monthly payout; you'll increase your benefit amount by 8% for every year you delay filing.
Now for the reality: It's entirely possible you'll need to claim benefits at 62 or at another time later in your 60s. You may simply decide you want the money early, or you may find that it's a necessity for health or family reasons. But if you have the ability to delay benefits, it's key to know that it will help you when it comes time to collect.
2. Earn more
Social Security tax is charged on every dollar up to the maximum taxable wage base, which is $147,000 in 2022. This means that for all amounts earned up to $147,000, you'll pay into the Social Security system and receive commensurate benefits when you file for them in retirement.
Only about 6% of wage earners actually hit the maximum taxable wage base in any given year, so don't fret if you aren't in that position. What matters is that you do your best to steadily increase your earnings as time goes on. This will increase your monthly benefit check in retirement even if you don't receive the maximum possible benefit.
3. Work for at least 35 years
Your Social Security calculation will take into account your 35 highest-earning years. Years that you didn't earn income (for any reason) will weigh down your calculated benefit. A zero is assigned to years of no income, pulling down the average.
Having some evidence of income for at least 35 years will help increase your calculated benefits and will support a higher monthly payout in retirement. While of course this may not be possible if life circumstances got in the way at one point or another, the fact is that it will impact how much you ultimately receive when you retire.
Putting it together
To receive the full $1,830 increase, you'll need to do all three: delay filing for benefits until age 70, earn at least the maximum taxable wage base every year, and do it in your 35 highest-earning years. For most, this is a tall order, which is why it doesn't necessarily need to be your goal.
A more reasonable way to think about this is to consider the variables of your personal circumstances, and do the best you can with regard to each goal. If you can come close to earning the maximum wage base, that's a win by itself. If you manage to work 30 years before calling it quits, that's a job well done.
The decision to take Social Security is often complex. Be aware of the factors that matter, but also try not to be too hard on yourself.