The average retired worker gets about $1,833 from Social Security as of March 2023. That amounts to nearly $22,000 throughout the year. But that's just a drop in the bucket compared to what the top Social Security earners rake in.
In 2023, the largest possible Social Security benefit is $4,555 per month or about $54,660 per year. But you only earn benefits like these if you check three very specific boxes. Here's what you need to do.
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1. Work at least 35 years
The Social Security Administration looks at your average annual income during your 35 highest-earning years, adjusted for inflation, when calculating your monthly benefit. So remaining in the workforce for at least this long is crucial if you want to maximize your checks.
Those who work fewer than 35 years can still be eligible for benefits. You only need to work enough to earn 40 credits to claim checks, where a credit is $1,610 in earnings in 2023, and you can earn a maximum of four credits per year. So as long as you've worked for at least 10 years, you'll get something. But those who have worked fewer than 35 years have zero-income years factored into their benefit calculation, and even one of these will cost them money.
There's no downside to working longer than 35 years, though. A lot of people earn more later in their careers, so working longer could actually boost their monthly benefits. Once you've passed the 35-year mark, the government begins discarding your lower-earning years and replacing them with higher-earning years in your benefit calculation, leading to larger checks.
2. Earn the maximum income subject to Social Security taxes
This second step is the reason most seniors don't qualify for the largest Social Security checks. You must pay the maximum amount in Social Security taxes over your 35 highest-earning years. And to do that, you have to make a lot of money.
The ceiling on income subject to Social Security taxes changes annually, but in 2023, you need to rake in a whopping $160,200 or more to pull this off. And for a lot of people, that's just not feasible.
But even if you aren't able to do it, taking steps to boost your income can still help increase your benefits in the future. You could try working overtime, finding a better-paying job, or starting a side hustle to get some extra cash coming in. As long as you pay Social Security taxes on that money, it should help increase your future checks.
3. Wait to claim until 70
You become eligible for Social Security when you turn 62, but that's actually not when you qualify for your full benefit. If you want the checks you're entitled to based on your work history, you must sign up at your full retirement age (FRA). This is anywhere from 66 to 67, depending on your birth year.
If you don't sign up then, the government runs an additional calculation that adjusts your standard benefit up or down. Claiming early reduces your checks by up to 30%, while delaying past your FRA increases them until you qualify for your largest checks at 70. This is somewhere between 124% and 132% of your standard benefit.
Delaying until 70 is essential if you hope to take home the maximum $4,555 monthly Social Security checks. But that doesn't mean it's the smartest decision for everyone. Those who need their Social Security checks to help them pay bills today and those who don't expect to live long are often better off signing up earlier.
On the other hand, delaying Social Security could make sense for you if you expect to live into your mid-80s or beyond and you have enough savings to cover your expenses until you're ready to apply. You can use the benefit calculator in your my Social Security account to try out a few scenarios and see how various claiming ages would affect your monthly benefit. Just choose a claiming age, and it will tell you approximately how much you'll receive per month based on your work history to date and future income estimates.
Whenever possible, aim to maximize your lifetime benefit. You can estimate this by multiplying your average monthly benefit by the number of months you expect to claim. For example, a $2,000 monthly benefit claimed for 20 years, or 240 months, would give you a lifetime benefit of $480,000.
Unfortunately for most people, the largest Social Security checks are probably out of the question due to the high income requirements. But you can still use the above tips to maximize your own checks. Just remember, Social Security rules change over time, so you may have to adjust your claiming strategy over the years as well.
