For millions of Americans, Social Security is a lifeline. In fact, nearly one-quarter of workers expect their benefits to be their primary source of income in retirement, a 2022 report from the Transamerica Center for Retirement Studies found.
However, the average retiree only collects around $1,800 per month in benefits, according to the most recent data from the Social Security Administration -- which is hardly enough for most people to live on comfortably.
The maximum benefit in 2023, though, is a whopping $4,555 per month. While it's not easy to achieve the max payments, it is possible. Here's what you'd need to do to earn it.
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What it takes to max out your Social Security
Your benefit amount is based on three main factors, one of which is your income throughout your career.
The maximum taxable earnings limit is the highest income subject to Social Security taxes. The more you earn up to that limit, the higher your payments will be. Once you surpass the limit, that income isn't subject to Social Security taxes, and your benefits won't increase any further.
This limit shifts from year to year to account for inflation. As of 2023, it's $160,200 per year. But to earn the max $4,555 monthly payments, you'll need to have been reaching the wage cap consistently throughout your career. (For context, the limit 40 years ago in 1983 was $35,700 per year.)
Other ways to increase your benefits
For most people, consistently reaching the income limit for Social Security is unrealistic -- and that's OK. You don't need to be earning six figures to boost your benefits.
Income is only one of the three factors affecting your benefit amount. The other two include:
- The number of years you've worked: The Social Security Administration calculates your benefit amount by taking an average of your earnings over the 35 highest-earning years of your career. If you've worked fewer than 35 years when you begin claiming, it will reduce your earnings average, thus lowering your benefit amount.
- The age you begin claiming: You can file for Social Security at any point after age 62, but the earlier you file, the smaller each check will be. To receive the full benefit amount based on your work record, you'll need to wait to claim until your full retirement age (FRA) -- which is age 67 for anyone born in 1960 or later.
You can also be strategic about these two factors to further increase your benefits. For example, if you delay claiming Social Security until age 70, you'll receive your full benefit amount plus a bonus of at least 24% per month.
Also, working for more than 35 years could increase the size of your payments. Chances are you're earning a higher salary at the end of your career than you were at the beginning, and the Social Security Administration only includes wages from your 35 highest-earning years in your benefit calculations.
If you continue working when you're earning a higher salary, that will ensure you have larger numbers in your earnings average -- which will result in a larger benefit amount.
Social Security is an integral source of income for many retirees, so it pays to make the most of them. Whether or not you're on track for the $4,555 monthly payments, maximizing your Social Security can lead to a far more comfortable retirement.
