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How Will Your Social Security Benefits Stack Up to the $1,557 Average?

By Katie Brockman – Sep 15, 2021 at 8:00AM

Key Points

  • The average retiree receives around $1,557 per month in benefits.
  • The maximum you can collect from Social Security is $3,895 per month.
  • How much you receive will depend on factors like your income and the length of your career.

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Are you on track to earn a higher-than-average benefit amount?

Social Security benefits are a substantial source of income for millions of retirees, so it's wise to make the most of them. Especially if your retirement savings are falling short, your monthly checks can go a long way toward helping you enjoy your senior years more comfortably.

As of July 2021, the average retirement benefit amount is around $1,557 per month, according to the Social Security Administration. The maximum amount you can collect, however, is $3,895 per month.

How much you receive in benefits will depend on several factors, and there are ways to ensure you collect a higher-than-average monthly payment. How will your benefits stack up to the average? And what can you do to get closer to the maximum payment? Here are the factors to consider.

Social Security cards

Image source: Getty Images.

1. The length of your career

When determining your basic benefit amount (or the amount you'll receive by filing for benefits at your full retirement age), the Social Security Administration looks at your earnings throughout the 35 highest-earning years of your career. Those earnings are averaged and adjusted for inflation, and the result is your benefit amount.

To earn a higher-than-average monthly payment, you'll need to ensure you've worked for at least 35 full years before you begin claiming. If you've worked fewer than 35 years, you'll have zeros included in your earnings average to account for the years you were not working. That, in turn, will bring down your basic benefit amount.

2. Your earnings

Not only does the length of your career make a difference in your benefit amount, but so do your earnings throughout your working years.

To earn the maximum benefit amount, you'll need to have been reaching the wage cap consistently. The wage cap is the maximum income that's subject to Social Security taxes, and for 2021, that limit is $142,800 per year.

If your income falls below that limit, that's OK. The majority of workers won't be able to reach the maximum benefit amount, but that doesn't mean you can't take steps to earn a higher-than-average monthly payment.

The more you're earning, the more you can collect in benefits. If you're able to pick up a side hustle or find a source of passive income, that can result in a higher benefit amount in retirement.

3. The age you begin claiming

Finally, the age you file for Social Security will have a dramatic impact on the amount you receive each month.

You can begin claiming benefits at 62 years old or any age after that. The longer you wait (up to age 70), the more you'll collect each month. While delaying benefits isn't the right move for everyone, if you are able to hold off on claiming, you could potentially receive hundreds of dollars more per month.

If your goal is to earn a higher-than-average benefit amount, delaying benefits could be a smart strategy. By waiting until age 70 to file, you could receive up to 32% more each month on top of your full benefit amount, which can go a long way.

How much will you receive in benefits?

The amount you ultimately collect in Social Security benefits will depend on many factors. However, you can check your benefit amount by reviewing your statements through your mySocialSecurity account. From there, you can see your estimated future benefit amount based on your actual earnings.

Keep in mind, though, that that number isn't necessarily set in stone. There are ways to increase the size of your monthly checks, and with the right strategy, you can give yourself the best shot at beating the average benefit amount.

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