The average retired worker collects around $1,840 per month in Social Security benefits, according to data released by the Social Security Administration in August 2023. However, it's possible to earn much more.
The maximum you can receive from Social Security, as of 2023, is a whopping $4,555 per month. As retirement costs continue to rise and many workers are finding it harder to save, that money can go a long way.
But achieving the max monthly payments isn't easy, and there are a few requirements you'll need to meet. Before you retire, take these three steps to see if you're on track for the maximum benefit.
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1. Determine how long you've worked
You only need to have worked and paid Social Security taxes for 10 years to qualify for retirement benefits. To earn as much as possible, though, you'll need to have worked a full 35 years before you begin claiming.
This has to do with how your benefits are calculated. The Social Security Administration takes an average of your wages throughout the 35 years you earned the most. That number is then adjusted for cost-of-living changes over the years, and the result is your basic benefit amount.
If you haven't worked a full 35 years before you begin claiming, you'll have zeros added to your earnings average to account for the time you weren't working. This will bring down your average and prevent you from reaching the maximum benefit amount.
2. Consider what age you want to start taking benefits
Your basic benefit amount (or the amount based on your career earnings) is what you'll receive by filing at your full retirement age (FRA). Your FRA depends on the year you were born, but it's age 67 for anyone born in 1960 or later.
Data source: The Motley Fool.
You can file at any age starting at 62 years old. But the only way to receive the maximum monthly payments is to wait until age 70 to begin claiming.
Even if you meet all of the other requirements, your benefit will be drastically reduced if you file before 70. For example, if you begin claiming at 65, the most you can receive is $3,279 per month. File at 62, and your max benefit would be just $2,572 per month.
3. Examine your career earnings
How much you've earned throughout your career will also have a major impact on your benefit amount.
To achieve the highest possible payments, you'll need to have been consistently reaching the maximum taxable earnings limit -- which is the highest annual income subject to Social Security taxes. The closer you get to this cap, the higher your benefit amount will be. Once you surpass it, your payments won't increase, no matter how much you're earning.
The earnings cap changes from year to year to account for inflation, but as of 2023, it's $160,200 per year. If you started your career 35 years ago in 1988, the limit back then was $45,000 per year.
Other ways to increase your benefits
If you're off track for the maximum benefit amount, that's OK. Very few workers will be able to meet all of the requirements, especially when it comes to reaching the earnings limit. But there are still ways to increase your monthly payments.
By getting as close as you can to each of the three requirements for the max payments, you can earn larger checks each month.
For example, maybe you can't delay benefits until age 70, but you can wait until your FRA. That alone could boost your payments by hundreds of dollars per month. Or perhaps you can't get anywhere near the $160,200 annual earnings cap, but you can work for at least 35 years before you file. That will also boost your benefits.
Taking even small steps can make a big difference, so try not to get discouraged if you're off track for the max Social Security payments. When you know what factors influence your benefit amount, you can head into retirement as prepared as possible.
