As you're preparing for retirement, one of the most important decisions you'll make is choosing when to file for Social Security benefits.
Age 62 is the earliest you can begin claiming, and it's also the most popular age to start taking benefits -- nearly 35% of men and 40% of women file at 62, according to a 2020 survey from the Bipartisan Policy Center.
While claiming benefits early will result in a reduced payment, you can still earn thousands of dollars per month. Here's how.
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How to reach the maximum Social Security benefit
In 2023, the maximum amount you can collect from Social Security is $4,555 per month. However, this assumes you'll file for benefits at age 70. If you begin claiming at 62, the highest payment you can receive is $2,572 per month.
To achieve the max payments at age 62, there are two important requirements you'll need to meet:
1. Work for at least 35 years
Your basic benefit amount -- or the amount you'll receive if you file at your full retirement age -- is based on your wages throughout the 35 highest-earning years of your career.
The Social Security Administration will take an average of your income over those 35 years, then adjust that number to account for inflation over the years. If you haven't worked 35 full years, you'll have zeros included in your average, and that will immediately disqualify you from the maximum benefit.
Again, if you file at 62, you'll already receive less per month than you would by claiming at your full retirement age. But if you work fewer than 35 years, that will reduce your basic benefit amount and result in an even smaller payment at age 62.
2. Consistently reach the wage cap
The wage cap is the highest income subject to Social Security taxes. The more you earn up to this limit, the higher your benefit amount will be. So to earn the maximum benefit, you'll need to consistently reach this limit throughout your career.
In most years, the wage cap will change slightly to account for shifts in inflation. In 2023, this limit is $160,200 per year. For context, 20 years ago in 2003, the wage cap was $87,000 per year. Thirty-five years ago in 1988, the limit was $45,000 per year.
Keep in mind, too, that the Social Security calculations aren't black or white. Most workers won't be able to reach the wage cap consistently, and that's OK. You don't necessarily need to reach this limit to increase your benefits. Boosting your income even slightly will still result in a larger payment, even if it falls short of the maximum amount.
How to check your benefit amount right now
It can be tough to tell whether you're on track to reach your Social Security goals, but there's a simple way to check your benefit amount online.
First, you'll need to create a mySocialSecurity account, if you don't have one already. From there, you can check your online statements to see an estimate of your future benefit amount based on your real earnings.
One thing to remember, though, is that your estimated benefit amount assumes you'll be filing at your full retirement age. If you begin claiming at 62, your payments will be permanently reduced by up to 30%.
Claiming Social Security at 62 can be a smart move for many people, and it's still possible to earn larger checks despite claiming early. With the right strategy, you could be on track to earn the $2,572 maximum monthly payments.
