Social Security is an integral part of retirement for millions of older adults. Roughly 83% of U.S. adults who have not yet retired say that their benefits will make up at least some of their income in retirement, according to a 2023 poll from Gallup, and more than one-third say it will be a major source of income.
If you're going to be relying heavily on your benefits to make ends meet, finding ways to maximize your payments could result in a much more financially secure retirement.
Your benefits are based on several factors, and knowing how much the average retiree receives -- and how to beat that figure -- can set you up for success down the road.
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How much is the average Social Security benefit?
Social Security benefits can vary widely from person to person. There are three main factors that will affect your payments: your earnings history, the length of your career, and the age you begin claiming.
In general, the higher your income, the more you'll receive from Social Security -- up to a point. The maximum taxable earnings limit is the highest income subject to Social Security taxes, and the closer you can get to this limit, the larger your payments will be. This limit changes from year to year to account for inflation, but in 2024, it's $168,600 per year.
The length of your career will also affect your checks. The Social Security Administration calculates your benefit by taking an average of your wages over the 35 highest-earning years of your career, and then that number is run through a complex formula to adjust for cost-of-living changes over the years.
Finally, the age you file for benefits will have an enormous impact on your benefit amount. To receive the full benefit amount you're entitled to based on your career earnings, you'll need to file at your full retirement age. If you claim before or after that age, you'll receive an adjusted amount.
The maximum you can collect from Social Security in 2024 is a whopping $4,873 per month. However, the average benefit is much lower. According to the most recent data from November 2023, the average retired worker receives around $1,845 per month, according to the Social Security Administration.
Exactly how to increase your monthly benefit
It's possible to earn much more than the average benefit, but you'll need the right strategy. The first step is to know how much you're expected to receive, and you can do this by checking your statements. If you haven't already, you'll need to create a mySocialSecurity account. From there, you can see an estimate of your future benefit based on your real earnings throughout your career.
Keep in mind that if you still have many years left in your career, this number could change between now and retirement. Your benefit estimate also assumes you'll file at your full retirement age. If you claim earlier than that, you'll receive a reduced amount. Delay benefits past that age, and you'll collect a bonus each month.
To achieve the maximum $4,873 monthly benefit, you'll need to have worked for at least 35 years, consistently reach the maximum taxable earnings limit, and wait until age 70 to begin claiming benefits.
It's incredibly difficult to earn the max payments, especially when it comes to reaching the maximum taxable earnings limit consistently throughout your career. So if you're off track, that's OK. If you can get at least a little closer to achieving any of these three goals, you can still boost your payments.
For example, maybe you can't reach the $168,600 maximum taxable earnings limit, but you can increase your income slightly. Or perhaps delaying benefits until 70 isn't realistic for you, but you can hold off until, say, age 65 or 67 to file. That alone could boost your payments by hundreds of dollars per month.
Social Security plays a major role in many Americans' retirement, and by taking steps to make the most of your payments, the more you can depend on your benefits later in life. With the right strategy, you may be able to beat the average benefit and set yourself up for a more comfortable retirement.
