If you've worked a long and highly compensated career, you may be in line for the maximum possible Social Security benefit when you retire. But even if you qualify for the largest possible retirement check, the age at which you claim can still have a massive effect on the ultimate size of your check.
There's a huge difference in the maximum retirement benefit of someone claiming as soon as possible at age 62 and someone who waits until their benefits have completely maxed out at age 70. Those waiting until their full retirement age, around 67, might find some middle ground between the two extremes.
The discrepancies in the maximum monthly checks received at each of those ages show how valuable it can be to delay benefits as long as possible.
Image source: Getty Images.
Here's the salary you need if you want the maximum Social Security benefit
The first step to maximizing your Social Security retirement benefit is earning a high income during your career.
When the Social Security Administration (SSA) calculates your monthly retirement benefit, it gathers your earnings history from throughout your career. It adjusts earnings from each year before you reach age 60 to be comparable to earnings in the year you turn 60 years old. Any earnings after that don't receive an adjustment. It then selects the 35 highest-earning years and calculates the average monthly income you received over those years.
That average income goes into a Social Security benefits formula to determine your primary insurance amount, or PIA. Your PIA is the amount you'd receive if you apply for Social Security benefits the month you reach your full retirement age (FRA), which will range between 66 and 67, depending on when you were born. Claiming before FRA results in a smaller benefit than your PIA. You can also delay benefits up to age 70, and you'll receive a bigger check as a result.
There's an important catch for high earners. Sometimes the SSA won't count all of your income. If your wages exceed an annual limit called the "contribution and benefit base" or "maximum taxable earnings," the SSA will substitute that limit in your earnings record for your actual earnings. That's because you won't pay any Social Security taxes on income above that limit. For 2024, the limit is $168,600.
Earning above the maximum taxable earnings for 35 years during your career will likely put you in a position to receive the maximum possible Social Security benefit when you retire. Here are the last 50 years of the maximum taxable earnings.
| Year | Earnings | Year | Earnings |
|---|---|---|---|
| 1975 | $14,100 | 2000 | $76,200 |
| 1976 | $15,300 | 2001 | $80,400 |
| 1977 | $16,500 | 2002 | $84,900 |
| 1978 | $17,700 | 2003 | $87,000 |
| 1979 | $22,900 | 2004 | $87,900 |
| 1980 | $25,900 | 2005 | $90,000 |
| 1981 | $29,700 | 2006 | $94,200 |
| 1982 | $32,400 | 2007 | $97,500 |
| 1983 | $35,700 | 2008 | $102,000 |
| 1984 | $37,800 | 2009 | $106,800 |
| 1985 | $39,600 | 2010 | $106,800 |
| 1986 | $42,000 | 2011 | $106,800 |
| 1987 | $43,800 | 2012 | $110,100 |
| 1988 | $45,000 | 2013 | $113,700 |
| 1989 | $48,000 | 2014 | $117,000 |
| 1990 | $51,300 | 2015 | $118,500 |
| 1991 | $53,400 | 2016 | $118,500 |
| 1992 | $55,500 | 2017 | $127,200 |
| 1993 | $57,600 | 2018 | $128,400 |
| 1994 | $60,600 | 2019 | $132,900 |
| 1995 | $61,200 | 2020 | $137,700 |
| 1996 | $62,700 | 2021 | $142,800 |
| 1997 | $65,400 | 2022 | $147,000 |
| 1998 | $68,400 | 2023 | $160,200 |
| 1999 | $72,600 | 2024 | $168,600 |
Data source: Social Security Administration.
Here's the maximum possible Social Security benefit at ages 62, 67, and 70
One of the most important decisions you'll face in retirement is when to claim Social Security benefits. Even if you've maxed out your earnings during your career, it can still be difficult to determine the best age for you, personally, to claim.
If you claim at age 62, you'll receive a nice-sized check up front, but likely still need to supplement your Social Security income with your personal retirement savings. On the other hand, waiting eight long years until age 70 to start collecting a much larger benefit might not feel worth it for some. Many retirees opt to split the difference and claim when they reach FRA, which will be age 67 for many readers.
Here's what the maximum benefit looks like for each of those ages in 2024.
| Retirement Age | 62 | 67 | 70 |
|---|---|---|---|
| Maximum Monthly Benefit | $2,710 | $3,911 | $4,873 |
Data source: Social Security Administration.
Even though the 70-year-old and the 62-year-old earned comparable salaries throughout their careers, the 70-year-old ends up receiving a monthly benefit check nearly 80% higher than their younger counterpart. The total difference is about $26,000 per year. That's enough to pay for a very nice vacation, maybe two, every year.
A small part of the difference in the amount is due to changes in the full retirement age, which are partially offset by the factors used to determine each age group's PIA. Still, someone who turned 62 this year can receive up to a 77% increase in their monthly benefit by delaying until age 70.
Is it worth the wait?
If you're in line to receive the maximum possible Social Security check, it's likely a smart decision to wait until age 70 to claim your benefit.
For one, you likely have ample retirement savings from your high-paying career. Even if you have to stretch your withdrawal rate a little bit to enjoy your early retirement years, it's likely worth it knowing you have a big supplemental check headed your way.
Another important consideration is survivor benefits. If you pass away before your spouse, they're eligible to collect whatever you were receiving from Social Security. As a result, your joint life expectancy tilts the odds of collecting more income from Social Security over your life to favor delaying as long as possible.
If you retire with considerable assets, there are also potential tax benefits to delaying your Social Security payments until age 70. The early years of retirement are an excellent opportunity to position retirement assets to reduce your taxable income over the long run, through strategies like Roth conversions and taking capital gains. That becomes more difficult when you have a steady stream of income from Social Security.
Even if you're not in line for the maximum possible Social Security benefit (yet), it often makes sense to delay benefits until age 70. A 2019 analysis from United Income found that 57% of retirees would maximize their wealth in retirement by waiting to claim as long as possible. Just 6.5% of retirees ended up wealthier by claiming before age 64. If you can afford to wait a few years before claiming Social Security, it often pays to delay, regardless of how big your benefit will be.
