Social Security benefits can potentially make or break your retirement, so it pays to ensure you're making the most of them. The average retiree collects around $1,657 per month, according to the Social Security Administration. The maximum amount you can earn in 2022, however, is $4,194 per month. For many older Americans, payments like that could make retirement more comfortable.
There are a few requirements you'll need to meet to earn the maximum benefit amount, and these three factors can help you determine whether you're on track.
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1. Your work history
The number of years you've worked before you begin claiming will affect the amount you receive each month. To calculate your benefit amount, the Social Security Administration takes an average of your earnings over the 35 highest-earning years of your career before adjusting that number for inflation. The result is the amount you'll receive if you file at your full retirement age (FRA).
In order to collect the maximum payments, you'll need to have worked a full 35 years before you begin claiming. Any less than that, and you'll have zeros added to your earnings average, which will bring down your benefit amount.
2. Your claiming age
If you file at your FRA, you'll receive the full benefit amount you're entitled to based on your work history. But to collect as much as possible, you'll need to wait until age 70 to begin claiming.
Delaying Social Security by a few years may not sound ideal but can seriously boost your benefits. In fact, even if you meet all the other requirements to earn the max benefit amount, if you were to file at, say, age 67, you'd only collect $3,568 per month -- roughly $600 per month less than the maximum payments.
3. Your career earnings
Perhaps the most important factor affecting your benefit amount is your earnings throughout your career. To earn as much as possible from Social Security, you'll need to be consistently reaching the maximum taxable earnings limit -- which is the highest income subject to Social Security taxes.
This limit changes from year to year to account for cost-of-living shifts, but in 2022, it's $147,000 per year. For context, 35 years ago in 1987, the maximum taxable earnings limit was $43,800 per year.
To earn the maximum Social Security payments, you'll need to have been reaching these limits consistently throughout your career.
What if you're falling short of the max benefit amount?
The vast majority of workers will not be able to achieve the $4,194 per month payments, and that's OK. With the right strategy, you can still get as close as possible.
Any one of these three factors can be used to increase your benefits. For example, maybe you're not earning enough to reach the maximum taxable earnings limit, but you can work a full 35 years before you file. That alone could result in higher payments each month.
Or maybe you can't delay benefits until age 70 but could wait an extra year or two to claim. Or perhaps you're not earning enough to reach the earnings limit, but you can boost your income slightly. Even small steps can result in a higher benefit amount, so try not to get discouraged if you can't reach the maximum payments.
The amount you receive from Social Security is largely within your control, and there are several ways to boost the size of your monthly checks. Regardless of whether you're on track to earn the $4,194 max payments or not, the right strategy can help you earn more than you might think.
