The maximum possible Social Security benefit in 2023 is $4,555 per month, or $54,660 per year. That’s a pretty high amount of inflation-protected retirement income. However, to get this much from Social Security, there are three main criteria that you have to meet.
In this article, we’ll go through the three things you need to do in order to qualify for the maximum possible Social Security benefit, why it might not be practical or possible to achieve, and what you can do to get as much as possible from Social Security when you start collecting benefits.
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Recipe for the maximum possible Social Security benefit
As mentioned, there are three things you need to do to get the $4,555 monthly maximum Social Security retirement benefit:
- Work for at least 35 years in employment covered by Social Security. Most workers achieve this target and then some.
- Earn at least the taxable maximum income for Social Security purposes in at least 35 years. In 2023, the taxable maximum is $160,200. Most Americans don’t reach the maximum in any one year, much less in 35 of them, so this is a big limiting factor.
- Wait until age 70 to start collecting benefits. Only 5% of men and 7% of women wait this long to take their benefits.
How you can maximize your own Social Security benefit
As you might guess, most people don’t get the maximum possible Social Security benefit, as it requires a combination of factors that are largely out of most Americans’ control. It is impossible for many people to max out their earnings for 35 years, especially if they’re already far into their career, and it might not be realistic to work until you’re 70 years old.
Having said that, there are some ways you can optimize your own Social Security benefit. Even if you can get an extra $100 per month, that translates to $1,200 per year in inflation-protected income for life, which can make a significant difference in your financial comfort.
Step one is to figure out where you stand. If you haven’t done so already, create an account at SSA.gov and view your latest Social Security statement. This document can give you an estimate of your future Social Security benefit based on your own work record, and even breaks it down into your estimated retirement benefit at different claiming ages.
The most surefire way to increase your benefit is to work longer. It doesn’t need to be a matter of years, either. Even a couple of months can make a difference. For example, if you delay Social Security beyond full retirement age, your benefit will be permanently increased by 0.67% for every month you wait. Retiring at 67 1/2 instead of 67 can add $80 per month to a $2,000 retirement benefit, just to give one example.
Not only can working longer increase your benefit this way, but if you’re in a relatively high-earning phase of your career in your 60s, working longer can have the additional effect of increasing your lifetime average earnings.
Speaking of your earnings, the other main way to increase your future Social Security is to increase your income if it’s below the current taxable maximum. There has never been as many opportunities to pick up gig work and side hustles as there is now, and a few years of elevated income can have a significant impact on your Social Security and can also help you set aside more in retirement accounts.
The bottom line
You may not be able to achieve the maximum possible Social Security benefit, but you may be able to have a meaningful impact on your future benefit checks. By knowing how much you’re on track to receive, as well as the main ways to increase your benefit, you’ll be in a great position to assess where you stand and modify your retirement strategy if needed.
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