Thousands of Americans file for Social Security retirement benefits without maximizing their potential earnings, potentially losing out on a significant amount of money. Understanding how to fully take advantage of the Social Security system is crucial to securing the largest possible payout.
How to Achieve the Maximum $4,873 Payment
To qualify for the maximum monthly Social Security payment of $4,873, the Social Security Administration (SSA) requires workers to meet several stringent criteria, starting with earning the taxable maximum for at least 35 years. The taxable maximum is the highest amount of income subject to Social Security tax, which changes annually. Here’s a list of recent taxable maximums:
- 2015: $118,500
- 2016: $118,500
- 2017: $127,200
- 2018: $128,400
- 2019: $132,900
- 2020: $137,700
- 2021: $142,800
- 2022: $147,000
- 2023: $160,200
- 2024: $168,600
(Source: SSA)
Achieving this requires a high salary over an extended period, specifically in jobs covered by Social Security. Workers who do not meet these qualifications will be ineligible for the maximum payout.
Age Matters: Filing at the Right Time
In addition to earning the taxable maximum for 35 years, filing at the right age is critical. To maximize benefits, retirees should wait until age 70 to file. Filing earlier results in lower payments, even if the worker meets all other criteria.
Those who file at the Full Retirement Age (FRA) will receive a maximum benefit of $3,822. This is $1,051 less than what they could receive by waiting until age 70, due to delayed retirement credits that increase benefits by about 8% per year after FRA.
Workers who file at the earliest possible age of 62 will see even lower payments, receiving up to $2,710 per month.
Key Takeaways for Maximizing Social Security Benefits
To secure the highest possible Social Security payment:
- Work for at least 35 years while earning at or above the taxable maximum in jobs covered by Social Security.
- Wait until age 70 to file for retirement benefits to take full advantage of delayed retirement credits.
By adhering to these guidelines, retirees can significantly boost their Social Security payments and avoid missing out on their potential earnings.