Social Security is a lifeline for many retirees, but the average retired worker only collects around $1,800 per month as of September 2023. That can make it tough to survive on benefits, especially if your savings are falling short.
However, it's possible to receive much more than the average amount from Social Security. In 2023, the maximum you can collect is $4,555 per month -- but that number will be going up next year. While that's a good thing for those nearing retirement, there's bad news, too.
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Reaching the maximum Social Security benefit
In 2024, the most you'll be able to collect in benefits is $4,873 per month -- a whopping $318 more per month (or nearly $4,000 more per year) than in 2023. The not-so-good news, though, is that it's becoming even more difficult to achieve the maximum payments.
To earn as much as possible in benefits, you'll need to meet three requirements:
- Work for at least 35 years: The Social Security Administration calculates your basic benefit amount by taking an average of your wages over the 35 highest-earning years of your career and then adjusting that figure for inflation. If you haven't worked at least 35 full years before you file, you'll receive a smaller benefit amount.
- Wait until age 70 to begin claiming: Your basic benefit amount based on your earnings is how much you'll receive at your full retirement age (age 67 for anyone born in 1960 or later). But to receive as much as possible each month, you'll need to wait until age 70 to begin claiming.
- Consistently reach the wage cap: The wage cap is the highest annual income subject to Social Security taxes. The closer you get to this limit, the larger your payments will be. Once you surpass the cap, your income will no longer affect your benefit amount.
Meeting the wage cap, in particular, is tough for many workers. This limit changes from year to year to account for inflation, and in 2023, it's $160,200 per year. Next year, though, it will be increasing to $168,600 per year.
To earn the maximum benefit, you'll need to have been consistently reaching the wage cap throughout your career. Because this limit continues to increase every year, it's getting more challenging to achieve this target. Even if you meet the other two requirements for the max benefit, not reaching the wage cap will make it impossible to earn the $4,873 monthly payments.
What you can do to increase your benefits
Reaching the maximum benefit is tough, and it's only getting tougher -- which can be discouraging for those who will be depending on Social Security in retirement. The good news, though, is that you can still increase your monthly payments by getting as close as you can to each of the three requirements for the maximum benefit.
For example, maybe you can't work for 35 years or wait until age 70 to begin claiming. But if you can work just one or two years longer or delay Social Security from age 62 to 65, those moves alone could potentially boost your benefits by hundreds of dollars per month. Also, even if you're unable to reach the $168,600 annual wage cap, increasing your income even a little can still result in larger payments.
Achieving the maximum $4,873 monthly benefit may not be feasible for most workers, but that doesn't mean you can't get as close as possible. When you know how your benefits are calculated, you can take steps to boost your monthly payments and enjoy a more financially secure retirement.
