Social Security doesn't pay seniors a single universal benefit. Rather, the amount of money you're entitled to from Social Security is based on your specific earnings record. And depending on that record, you may be eligible for this year's maximum benefit of $3,895 a month.
But scoring the maximum benefit will require a lot of strategy on your part. Here's what it takes to snag $3,895 a month.
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1. Make sure you work for 35 years
Social Security bases your retirement benefit on the wages you collect during your 35 most profitable years in the workforce. Now those years don't have to be consecutive, and earlier wages are adjusted to account for inflation as part of Social Security's formula. But if you don't work at least 35 years, you can write off the idea of getting that maximum benefit.
The reason? For each year within that 35 you don't have an income on file, you'll have a $0 factored into your benefits formula. If your complete work record includes 34 years of high earnings, you might still wind up with a generous monthly benefit, but you won't be able to claim Social Security's maximum benefit.
2. Earn enough to hit the annual wage cap
Workers are required to pay Social Security taxes on their income. It's those taxes that fund the program and allow it to keep paying benefits.
But if you earn a large salary, you may not pay taxes on all of your income. That's because there's a wage cap in place each year that limits the amount of income subject to Social Security taxes.
This year, the wage cap is $142,800. Come next year, it's rising to $147,000. To snag the maximum Social Security benefit, you'll need to make sure your earnings are equal to or more than the annual wage cap over the course of the 35-year period that's counted in your benefits calculation.
3. File for benefits at age 70
You're eligible to receive your full monthly Social Security benefit based on your wage history once full retirement age (FRA) arrives. That year is either 66, 67, or somewhere in between, depending on the year you were born.
You're allowed to file for benefits outside of FRA, though. In fact, you can sign up as early as age 62. But filing before FRA will slash your Social Security income for life.
On the flipside, delaying your claim beyond FRA will result in an 8% boost to your benefits for each year you hold off. Once you turn 70, that incentive runs out. But if you delay your filing until age 70, you'll put yourself in a strong position to score the maximum Social Security benefit, provided you meet the other two criteria above.
Is a $3,895 monthly benefit realistic for you?
Clearly, getting the maximum Social Security benefit isn't easy, which is why the typical senior collects a lot less money each month. But even if you can't walk away with $3,895 a month in Social Security, you can still take steps to raise your benefits by fighting for raises during your career, making sure to work at least 35 years, and delaying your filing until age 70.
Of course, it's also a good idea to save for retirement so you have income outside of Social Security to fall back on. While some seniors may be in line for a monthly benefit of $3,895 this year, the average senior collects $1,565. Having an IRA or 401(k) plan to tap could make it much easier to get by in retirement if the benefit you wind up collecting is closer to what the typical senior receives.
