Social Security can make or break retirement for many people, with some older adults relying on their benefits for the majority of their income.
While the average benefit amount among retirees is around $1,900 per month, as of December 2023, the maximum possible payment is a whopping $4,873 per month. While it's not easy to achieve the max benefit, the right strategy can help you get as close as possible.
Your earnings history will have a major impact on your benefit amount, and there's a certain salary you'll need to reach the maximum payment. Here's everything you need to know.
The three steps to earning $4,873 per month
There are three main factors that affect your benefit amount: the length of your career, the age you begin claiming, and your income.
The Social Security Administration calculates your benefit by taking an average of your wages 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 the amount you'll receive by filing at your full retirement age (FRA).
Your FRA will depend on your birth year, but it's age 67 for anyone born in 1960 or later. You can file before that (as early as age 62), but your payments will be permanently reduced by up to 30%. If you delay benefits past your FRA (up to age 70), you'll receive your full benefit plus a bonus of between 24% and 32% per month.
Finally, you'll need to have been consistently reaching the maximum taxable earnings limit, or wage cap. This is the highest income subject to Social Security taxes, and the closer you can get to this cap, the higher your benefit will be. Once you surpass this limit, your income will no longer affect your payments.
The wage cap changes from year to year to account for inflation, but in 2024, it's $168,600 per year. For context, if you began your career 35 years ago in 1989, the limit that year was $48,000 per year.
Other ways to increase your benefits
To reach the maximum $4,873 monthly payments, you'll need to have worked for at least 35 years, consistently reach the maximum taxable earnings limit throughout your career, and delay claiming Social Security until age 70.
It's incredibly difficult to meet all three of these requirements, so if you're off track, that's OK. The maximum benefit isn't designed to be achievable by the average worker, so it's normal if it's out of reach.
That said, you can still increase your payments by getting as close as you can to any of these three benchmarks. For example, maybe you can't reach the $168,600 annual wage cap, but you can increase your income slightly. That can still increase your benefit. Or perhaps you can't delay benefits until age 70, but you can wait until age 67. That alone could boost your payments by hundreds of dollars per month.
Achieving the maximum Social Security benefit isn't easy, but you don't necessarily need to max out your payments to enjoy a more comfortable retirement. Small steps can make a big difference, and even if you're off track for the $4,873 monthly payment, you could still earn more than you might think.
