Approximately 65 million Americans depend on Social Security benefits, and more than 45 million of those are retirees.
The average benefit amount is just over $1,500 per month, according to the Social Security Administration, or around $18,000 per year. If you're going to be relying on your benefits to make ends meet during retirement, that money likely won't go very far.
However, you could potentially collect significantly more than that from Social Security. In fact, you could receive $3,148 per month depending on your salary.
Maximizing your monthly checks
First, it's important to understand how your benefits are calculated. The Social Security Administration takes an average of your income over the 35 highest-earning years of your career, then adjusts it for inflation. The result is your basic benefit amount, or the amount that you'll receive if you claim at your full retirement age (FRA).
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For those born in 1960 or later, your FRA is age 67. If you were born before 1960, your FRA is either 66 or 66 and a certain number of months, depending on the exact year you were born. Claiming earlier than your FRA will result in benefit reductions of up to 30%, so if you want to maximize your monthly payments, it's often wise to wait.
In 2021, the maximum amount you can receive by claiming at your FRA is $3,148 per month. To collect that amount, you'll need to have been reaching the maximum taxable earnings limit -- which is the maximum earnings subject to Social Security payroll tax -- for at least 35 years.
That cap is $142,800 per year for 2021, but the maximum taxable earnings limit changes slightly each year to account for inflation:
| Year | Maximum Taxable Earnings Limit | Year | Maximum Taxable Earnings Limit |
|---|---|---|---|
| 2021 | $142,800 | 2010 | $106,800 |
| 2020 | $137,700 | 2009 | $106,800 |
| 2019 | $132,900 | 2008 | $102,000 |
| 2018 | $128,400 | 2007 | $97,500 |
| 2017 | $127,200 | 2006 | $94,200 |
| 2016 | $118,500 | 2005 | $90,000 |
| 2015 | $118,500 | 2004 | $87,900 |
| 2014 | $117,000 | 2003 | $87,000 |
| 2013 | $113,700 | 2002 | $84,900 |
| 2012 | $110,100 | 2001 | $80,400 |
| 2011 | $106,800 | 2000 | $76,200 |
Source: Social Security Administration
If your goal is to collect the maximum benefit amount each month, you'll need to have been reaching the maximum taxable earnings limit consistently over 35 years.
What if that goal is not realistic?
It's not realistic for the average American to reach the maximum taxable earnings limit for the majority of their career. However, that doesn't mean you can't find ways to increase your benefit amount.
Delaying Social Security benefits is one option, because the longer you wait to begin claiming (up to age 70), the more you'll receive each month. In fact, if you have an FRA of 66 years old and you wait until age 70 to claim, you'll receive your basic benefit amount plus an additional 32% each month for the rest of your life.
It also helps to ensure you've worked for at least 35 years before you begin claiming; if you've worked fewer than that, your earnings average (and your basic benefit amount) will be lower. Boosting your income will also result in larger monthly checks, so if you can swing it, you might consider picking up a second job to increase your benefit amount.
Social Security benefits are a substantial source of income for millions of Americans, so it's wise to ensure you're collecting as much as possible. Whether or not it's feasible to receive $3,148 per month, finding ways to maximize your monthly checks is one of the smartest retirement moves you can make.
