The average Social Security benefit in 2023 is approximately $1,848 per month. That’s not bad, but it’s a long way from the maximum monthly check amount of $4,555. If he met those conditions, he would have received $54,660 in benefits this year.
2024 has even more in store. Below, we’ll take a look at the maximum Social Security benefits next year and who will qualify for them.
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3 things you must do to maximize your Social Security benefits
There’s a three-step formula for claiming maximum Social Security benefits, but it’s not as easy as you might think. We’ll take a closer look at each step below.
1. Work for at least 35 years
The Social Security Administration determines your benefit amount based on your average monthly income over your 35 highest-earning years, adjusted for inflation. This is known as the Average Indexed Monthly Earnings (AIME).
You can still claim Social Security benefits if you have less than 35 years of service, but the number of years with zero income will be taken into account. Any one of these could result in your benefits being reduced, putting you out of the race for the biggest Social Security benefit possible. advantage.
But there are no downsides to working for 35+ years. This often works to people’s advantage, as many earn more money later in their career than they did at the beginning. After 35 years, previous low-income years begin to be excluded from benefit calculations.
2. Pay the highest income subject to Social Security tax for 35 years
This is the step that most people are not eligible to participate in. To receive the largest check, you must pay the highest amount of Social Security payroll taxes during the 35 years in which you earned the most. In 2023, the Social Security Administration will tax the first $160,200 you earn. This will increase him to $168,600 in 2024. And most of us don’t earn that much in a year.
If it’s any consolation, it’s that the maximum income subject to Social Security taxes used to be lower. But it was an equally high bar for workers at the time. Few people claim maximum Social Security benefits because it’s not realistic for most people to earn that high income for 35 years.
3. Claim Social Security when you turn 70
You can become eligible for Social Security benefits at age 62, but the government is considering filing an early claim at that point. Each time you request a check before Full Retirement Age (FRA), which is between 66 and 67 for current workers, the amount of your check will be reduced. In other words, each time you delay Social Security, your check will continue to grow a little bit more.
However, this stops at 70 if you qualify for the maximum benefit. Those who want to claim the largest possible check will have to wait until then to apply. However, that’s not always true. For example, people with a short life expectancy are often better off applying early, even if it means accepting a smaller check.
If you completed all three steps above, congratulations! In 2024, you can expect to receive a check for $4,873 per month. That would leave you with $58,476 next year, which you can supplement with personal savings or income from your job.
What if I don’t qualify for maximum Social Security benefits?
Don’t be discouraged if you don’t qualify for the maximum Social Security benefit. Most people don’t. However, you can use the information above to increase your future checks even if you haven’t applied yet. Determine the Social Security claiming age that’s best for you so you can continue working, take steps to maximize your income now, and take advantage of as much of the program as possible.
