For many older adults, Social Security can make or break retirement. More than one-third of nonretired adults say their benefits will be a major source of income in retirement, according to a 2023 Gallup poll, and an additional 48% say they'll be depending on Social Security but to a lesser degree.
If you're going to be relying on your benefits, it's wise to make the most of them. The age you begin claiming will have an enormous impact on the amount you receive each month, and while you can file as early as age 62, it will result in smaller checks each month.
That said, it's still possible to receive thousands of dollars per month even when claiming early. Here's the maximum benefit you can collect at age 62 as of 2024, as well as exactly how to achieve those payments.
Image source: Getty Images.
The factors that influence your benefit amount
Aside from your age, the other two primary factors that affect your benefit amount are your earnings history and the length of your career.
The Social Security Administration calculates your benefit by taking an average of your earnings throughout the 35 highest-earning years of your career. That number is then adjusted for inflation and run through a complex formula, and the result is your full benefit amount -- or the amount you'll receive if you file at your full retirement age (FRA).
Your FRA will depend on the year you were born, but it's somewhere between ages 66 and 67 for everyone. The earlier you file before your FRA, the less you'll receive each month. If you have an FRA of 67 years old and claim at 62, your benefit will be permanently reduced by 30% per month.
Image source: The Motley Fool.
However, it's still possible to earn large payments even when claiming early. In 2024, the maximum you can receive by filing at 62 is $2,710 per month. For context, the maximum payment at age 67 is $3,911 per month, and at age 70 it's $4,873 per month.
How to earn the highest possible benefit
To collect the true maximum Social Security benefit, you'll need to wait until age 70 to begin claiming. But if you'd prefer to claim early, you can still earn the highest payments for your age.
The first step is to ensure you've worked for at least 35 years. Because the Social Security Administration uses the 35 highest-earning years of your career to calculate your payments, if you've worked fewer than 35 years by the time you file for benefits, you'll have zeros added to your average to account for the time you weren't working. This will reduce your average and give you a smaller benefit.
Next, you'll need to consistently reach the maximum taxable earnings limit, or wage cap. This is the highest income subject to Social Security taxes. The closer you get to this limit, the more you'll receive in benefits. Once you surpass this cap, it won't result in larger checks.
The wage cap changes from year to year to account for inflation, but in 2024, it's $168,600 per year. If you started your career 35 years ago in 1989, the limit that year was $48,000 per year.
Other ways to increase your benefit
Reaching the maximum possible benefit is incredibly difficult, so if you're off track, that's OK. By taking even small steps toward these goals, though, you can still increase your payments.
For example, maybe you can't work 35 full years, but you can work a year or two longer. Or perhaps you can't reach the $168,600 annual wage cap, but you can increase your income slightly. Those steps alone will still increase your benefit amount.
Also, while claiming at 62 isn't necessarily a bad idea, delaying benefits will substantially boost your payments. Again, filing at 62 will permanently reduce your benefits by up to 30% compared to what you'd receive at your FRA. Delaying claiming by even one or two years, then, could potentially boost your benefits by hundreds of dollars per month.
Social Security can make a massive difference in the quality of your retirement, so it's smart to have a strategy in mind to maximize your payments. If you're planning to take benefits at age 62, the right steps could help you earn as much as possible.
