Social Security's maximum benefit will reach its highest level ever beginning in January, with some seniors taking home $4,555 per month. That's nearly $55,000 per year just in Social Security benefits. Paired with personal savings, that could go pretty far.
But if you know anyone who's on Social Security, you know most checks aren't even close to that much. Here's what you'd have to do if you wanted to rake in the largest possible benefit next year.
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Step 1: Work at least 35 years
Only people who have worked for at least 35 years before claiming Social Security are eligible for the maximum benefit. This is because the Social Security Administration bases your benefit on your average monthly income during your 35 highest-earning years with adjustments for inflation.
Working more years could improve your odds of securing a large benefit because many people earn more later in their careers than they did when they first entered the workforce. Over time, these lower-earning years drop out of their benefit calculation and the newer, higher-earning years replace them, leading to bigger checks.
On the other hand, working fewer years can shrink your checks significantly. No matter how long you've worked, the government always looks at 35 years' worth of data. That means it'll add as many zero-income years as necessary to your calculation, and each one of these can drop your checks by a few dollars. So whenever possible, it's best to remain in the workforce for at least 35 years before claiming.
Step 2: Earn a lot of money throughout your career
This is the part that usually ends the dream of the $4,555 benefit for most people. In order to claim the maximum benefit, you must have paid the maximum amount of Social Security payroll taxes during your 35 years of work. And that's a lot of money.
In 2022, for example, you pay Social Security taxes on the first $147,000 you earn. This ceiling was lower in prior years, but it's been well into the six figures for a long time. If you don't earn anywhere close to that much, you won't qualify for the maximum benefit next year.
Step 3: Sign up at 70
You become eligible for Social Security when you turn 62, but signing up then is considered claiming early. It'll get you more checks and it might be the right move for some people. But it could result in a smaller lifetime benefit for others because claiming early reduces your monthly benefit.
Every month you delay benefits grows your check a little. When you reach your full retirement age (FRA) -- 66 to 67 for today's workers -- you qualify for the full benefit you've earned based on your work history. But you don't have to stop there. You can continue growing your checks by delaying Social Security until you qualify for your maximum benefit at 70.
This is what seniors hoping to claim the largest possible Social Security benefit must do. But delaying benefits isn't always the best option. Doing this means you'll have to cover all your living expenses on your own until you're ready to claim. And those who don't expect to live past their 70s may end up with a smaller lifetime benefit by delaying because they won't be able to claim checks for as many years. These individuals may be better off signing up for Social Security sooner.
Don't feel bad if you don't qualify for the largest Social Security benefit in 2023. Most people don't. But even if your checks don't come close to the $4,555 max, you can still leverage the information above to squeeze more out of the program. Working longer, seizing every opportunity to increase your income today, and choosing your starting age carefully can make a huge difference in how much you end up with.
