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3 Steps to Claiming the $3,895 Max Monthly Social Security Benefit

By Maurie Backman - Jun 13, 2021 at 5:36AM

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Here's how to snag an impressive Social Security payday -- and set yourself up with a lot more retirement income.

The typical senior on Social Security collects $1,543 a month. And while that sum, combined with distributions from a retirement savings plan, could make for a comfortable lifestyle, not everyone has a pile of money socked away in an IRA or 401(k).

The good news, however, is that while the average beneficiary today collects $1,543 a month in Social Security, you have the potential to collect a lot more. In fact, if you play your cards right, you could end up with as much as $3,895 a month, which is the maximum benefit you can eke out this year.

Here are three steps to claiming the highest Social Security benefit possible -- and enjoying a lot more financial freedom during your senior years.

Pair of Social Security cards on a pile of bills

Image source: Getty Images.

1. Boost your earnings as much as you can

The Social Security benefit you're entitled to isn't arbitrary or universal. Rather, it's based on your specific wage history. And so the more money you earn, the higher your benefit will be.

Now to snag the maximum Social Security benefit, you'll need to earn the maximum wage that's subject to Social Security taxes. Each year, there's a wage cap that's put in place to determine how much income gets taxed for Social Security purposes. In 2020, it was $137,700. This year, it's $142,800.

Once your earnings exceed that wage cap, they no longer count for Social Security purposes -- and they also don't get taxed. In other words, as long as you earn $142,800 this year, you'll set yourself up to snag the maximum retirement benefit.

One thing you should know is that it's not just your salary that counts toward the wage cap. If you earn $130,000 a year but make another $12,800 with a side hustle, that puts you at $142,800 for Social Security purposes.

Of course, not everyone will manage to bring home an income that's equal to or above the annual Social Security wage cap. But if you're on the cusp, doing a little work on the side could get you there.

2. Work at least 35 years

Your career may last well more than 35 years if you start working in your early 20s and keep at it until your late 60s. But it's only your highest-paid 35 years on the job that count toward calculating your Social Security benefit.

What this means, however, is that it's important to work a full 35 years, even if you're a higher earner. Otherwise, for each year you're missing an income, you'll have a $0 factored into your benefits calculation, which will leave you with a lower monthly benefit in retirement.

3. Delay your filing as long as possible

Even if your annual income meets or exceeds the Social Security wage cap, that's not enough to score the highest possible monthly benefit. To do that, you'll also need to delay your filing beyond full retirement age.

Full retirement age is when you can claim your monthly benefit in full. If you were born in 1960 or later, that age is 67. Otherwise, it's 66, or 66 and a specific number of months.

For each year you delay your filing past full retirement age, your benefits grow 8%, up until the age of 70. At that point, you can't accrue any more delayed retirement credits. But if you hold off no claiming benefits until 70, you might walk away with $3,895 a month.

Claiming the maximum $3,895 a month Social Security benefit is not an easy thing to do. But even if you don't manage to squeeze out $3,895 a month from Social Security, these moves could help you score a higher benefit for life. And that's a good way to buy yourself some financial peace of mind for retirement.

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