Maximizing your Social Security benefits is one of the best ways to set yourself up for a prosperous retirement. About half of all retirees age 65 and older rely on Social Security for the majority of their income, according to data reviewed by the Social Security Administration.
The two biggest factors affecting how much you'll receive in Social Security are how much you earn during your career and when you claim your benefits. Even if you maximize your earnings, there's still a huge difference between what you could claim at 62, 66, 67, or 70. That's extremely clear in the maximum Social Security benefits at each of those ages.
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The first step of maximizing Social Security
If you want to maximize Social Security, you'll need to consistently earn a high income throughout your career.
When the Social Security Administration (SSA) calculates your retirement benefit, it looks at your earnings history, and it selects the 35 highest-earning years, adjusted for inflation. It then averages those 35 years and puts that number into a formula to determine your primary insurance amount (PIA). That's the amount you'll receive if you claim benefits at your full retirement age, which ranges from age 66 to age 67, depending on when you were born. If you claim before your full retirement age, you'll receive less than your PIA; if you claim after, you'll receive more.
But the SSA won't always count all of your income as part of its calculation. There's a maximum amount that counts toward Social Security every year called the "contribution and benefit base." The SSA adjusts the amount for inflation every year. In 2024, the contribution and benefit base is $168,600.
If you earn above that limit for 35 years in your career, you'll earn the maximum possible Social Security benefit. For your reference, here are the last 50 years of the earnings cap.
| Year | Earnings | Year | Earnings |
|---|---|---|---|
| 1973 | $10,800 | 1999 | $72,600 |
| 1974 | $13,200 | 2000 | $76,200 |
| 1975 | $14,100 | 2001 | $80,400 |
| 1976 | $15,300 | 2002 | $84,900 |
| 1977 | $16,500 | 2003 | $87,000 |
| 1978 | $17,700 | 2004 | $87,900 |
| 1979 | $22,900 | 2005 | $90,000 |
| 1980 | $25,900 | 2006 | $94,200 |
| 1981 | $29,700 | 2007 | $97,500 |
| 1982 | $32,400 | 2008 | $102,000 |
| 1983 | $35,700 | 2009 | $106,800 |
| 1984 | $37,800 | 2010 | $106,800 |
| 1985 | $39,600 | 2011 | $106,800 |
| 1986 | $42,000 | 2012 | $110,100 |
| 1987 | $43,800 | 2013 | $113,700 |
| 1988 | $45,000 | 2014 | $117,000 |
| 1989 | $48,000 | 2015 | $118,500 |
| 1990 | $51,300 | 2016 | $118,500 |
| 1991 | $53,400 | 2017 | $127,200 |
| 1992 | $55,500 | 2018 | $128,400 |
| 1993 | $57,600 | 2019 | $132,900 |
| 1994 | $60,600 | 2020 | $137,700 |
| 1995 | $61,200 | 2021 | $142,800 |
| 1996 | $62,700 | 2022 | $147,000 |
| 1997 | $65,400 | 2023 | $160,200 |
| 1998 | $68,400 | 2024 | $168,600 |
Data source: Social Security Administration.
Consistently earning a salary that high is quite an achievement and will set you up well for retirement.
Here's the maximum possible Social Security benefit at ages 62, 66, 67, and 70
If you earn enough to qualify for the maximum possible Social Security benefit, it still matters when you claim. Claiming at 62 will result in a much lower monthly benefits check than claiming at age 70. On the other hand, you'll receive eight more years of benefit checks if you claim as soon as possible. Many retirees opt to split the difference, waiting until around their full retirement age to claim benefits.
Here's what the maximum benefit looks like at each of these key ages in 2024.
| Retirement Age | 62 | 66 | 67 | 70 |
|---|---|---|---|---|
| Maximum monthly benefit | $2,710 | $3,652 | $3,911 | $4,873 |
Data source: Social Security Administration.
As you can see, the maximum benefit varies widely depending on the age at which you claim it. A 70-year-old claiming maximum benefits in 2024 will receive $58,476 in annual income. That's enough to replace the average income in the U.S. A 62-year-old claiming the maximum benefit will only take home about $32,520, which they'll likely need to supplement with other retirement savings.
Is it worth delaying benefits in 2024?
Someone who earned enough to maximize Social Security is likely in a good position to delay benefits if they want.
It might be tempting, however, to claim your benefits as soon as possible and leave more of your retirement savings invested in the stock market. The idea is that you might be able to outperform the returns provided by Social Security.
But consider that delaying Social Security from age 62 through age 70 provides a guaranteed 7.4% real compound annual growth rate on your monthly benefits check. The S&P 500, meanwhile, averages just a 6.5% real compound annual growth rate, and it comes with much more risk.
There are certainly risks involved with delaying benefits until age 70, but they err on the side of being too conservative (like passing away before you break even, versus claiming early). For someone with lots of wealth to conserve, that's not a bad way to err.
The data backs up that notion. An analysis conducted by United Income in 2019 found that 57% of retirees would maximize their wealth in retirement by waiting to claim until age 70. Just 6.5% of retirees ended up with more wealth by claiming before age 64 So, if you can afford to delay your benefits, it pays to do so, even if you're not (yet) in line to get the maximum benefit from Social Security.
