Social Security's maximum benefit hit an all-time high this year at $4,873 per month. That's more than what many of today's workers take in. But it's not a realistic expectation for most people trying to estimate how much they'll get from the program in retirement.
Claiming the top benefit requires you to earn a consistently high income -- equal to at least $168,600 in 2024 dollars -- across 35 years. That's not doable for most people, but that's OK. You can still grow your checks quite a bit by taking the following three steps.
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1. Boost your income today
The Social Security Administration bases your benefit on your average monthly income throughout your career. Typically, anything you do to increase your income today will also boost your future Social Security checks.
There are many ways to go about this. Some people opt to negotiate a raise while others might prefer to find a better-paying employer or switch careers altogether. More entrepreneurial people might decide to start a side hustle to bring in extra cash.
Just remember, your extra income is only going to boost your future benefit checks if you're paying Social Security taxes on it today. Most workers owe these taxes on all their income during the year, but that's not the case for high earners. If you earn more than $168,600 in 2024 -- the maximum income subject to Social Security payroll tax -- anything over this amount won't affect your benefits.
2. Work at least 35 years
We've talked about how the government bases your Social Security benefit on your income during your working years. More specifically, it looks at your 35 highest-earning years. Working even longer than this can be advantageous because many people earn more later in their careers than they did starting out. Passing the 35-year mark means your higher-earning years start to replace your lowest-earning years in your benefit calculation.
You might think that if you work fewer than 35 years, the government just considers all your income throughout your career, but that's not the whole story. It looks at all your income and it adds zero-income years as well. If you worked 34 years, you'll have one zero-income year included, if you worked 33 years, you'll have two, and so on.
Even one zero-income year can drop your monthly benefit. If you earned $60,000, adjusted for inflation, every year for 35 years, you'd be eligible for a $2,281 monthly benefit at your full retirement age (FRA). More on that below. But if you worked just 34 years, you'd have one zero-income year included in your benefit calculation, which would drop your checks by $46 to $2,235 per month. So whenever possible, it's worth staying in the workforce for at least 35 years.
3. Time your claim appropriately
You must claim Social Security at your full retirement age (FRA) if you want the full benefit you've earned based on your work history. The government decides your FRA based on your birth year. It's 67 for most workers today, though some older adults have FRAs as young as 66.
If you apply at any other age, the Social Security Administration adjusts your benefit up or down accordingly. Claiming early results in more checks, but each one is smaller. You reduce your benefit by 5/9 of 1% per month for up to 36 months of early claiming. Those who start even earlier lose an extra 5/12 of 1% per month. That results in a benefit that's 25% to 30% lower for those who apply immediately at 62.
Delaying grows your checks over time, and that doesn't stop at your FRA. Past this point, your checks grow by 2/3 of 1% per month, or 8% per year, until you turn 70. That's when you become eligible for your maximum Social Security benefit.
Waiting to apply makes sense if you can afford to put off benefits for a while and you expect to live into your 80s or beyond. But those who need Social Security to make ends meet sooner and those with shorter life expectancies typically do better by claiming earlier. It's ultimately up to you, though, to choose the claiming strategy you're most comfortable with.
Do your best to keep the three tips above in mind as you move closer toward your retirement. You may need to revisit your plan over time. Job changes and changes to your retirement plan or Social Security itself could affect your maximum benefit or when you want to claim.
