What’s the biggest possible Social Security check a retiree can receive? For 2023, it’s $4,555 per month1 if you retire at age 70—far more than the national average of $1,827.2 But very few people qualify for the maximum benefit that would total $54,660 a year. Here are a few tips for getting the most out of your benefit.
Be a High Earner
To get the maximum benefit possible, you must have earned the maximum taxable income for 35 years. For 2023, for example, the maximum amount of income that’s subject to Social Security tax is $160,200. A mere 6% of workers earn more than the taxable maximum in any given year.3
Have a Long Career
To pocket the maximum benefit, you’ll need to have been employed for at least 35 years. Social Security benefits are calculated based on the 35 years in which a person earned the most income. If a taxpayer has worked for fewer than 35 years, the years without earnings are counted as zeros, which can lower the average earnings used to calculate the benefit.
Delay Receiving Your Benefit
Social Security benefits can be claimed as early as age 62. However, the benefit increases by a certain percentage for each year that you delay claiming benefits beyond your full retirement age, up to age 70. Note that no further increase in benefits happens if you wait past age 70 to receive your benefit. This is called the delayed retirement credit. The percentage of the delayed retirement credit varies based on the year you were born. For those born in 1943 or later, the delayed retirement credit is 8% per year for each year you delay receiving your benefits beyond your full retirement age, up to age 70. For example, if your full retirement age is 66 and you delay receiving your benefits until age 70, your monthly benefit will increase by 32% (8% per year for four years).
Ensure Accurate Earnings Records
Since Social Security benefits are based on your earnings history, it’s important to make sure that the earnings records maintained by the Social Security Administration are accurate. Taxpayers can check their earnings history by creating an account on the Social Security website or by contacting the Social Security Administration.
Don’t Earn Too Much
If a Social Security recipient who works is under full retirement age for the entire year, the Social Security Administration deducts $1 from their benefit payments for every $2 earned above the annual limit. The limit for 2023 is $21,240. Once workers reach full retirement age, Social Security deducts $1 for every $3 earned above a different, higher limit—$56,520 for 2023.4
Talk to Your Wealth Advisor
Whether you merit the top payout or not, Social Security benefits can make up a meaningful percentage of retirement income even for wealthy individuals. Your wealth advisor can help you arrive at the best strategy for you on balance with your other sources of retirement income.
It’s important to note that delaying receiving your benefits is not necessarily the best option for everyone. You should consider your individual circumstances, such as your financial needs, health and life expectancy, before deciding when to start receiving your monthly benefit.
Footnotes
1“What is The Maximum Social Security Retirement Benefit Payable?”
2“What is the average monthly benefit for a retired worker?”
3 “Research, Statistics & Policy Analysis”
4“Receiving Benefits While Working”
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