3 steps to claim the maximum monthly Social Security benefit of $4,873

The highest monthly Social Security benefit that can be paid to a recipient in 2024 is $4,873, which equates to nearly $58,500 in annual retirement income. While that would certainly be a nice amount of inflation-protected income to have in retirement, the unfortunate reality is that few retired workers get the maximum.

To receive the maximum possible benefit, there are a few steps you’ll need to follow, but less than 1% of Americans on Social Security can check all three of these boxes.

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Step 1: Work at least 35 years in a job covered by Social Security

This is the easy part for most American workers. When determining your Social Security benefit, the Social Security Administration, or SSA, averages your 35 highest-earning years.

If you worked less than 35 years, the zeros are averaged in the formula. If zero dollar years are used to calculate your average earnings, your benefit will not be as high as it could be. So, the first step toward claiming the maximum monthly Social Security benefit is to work for 35 years or more at a job covered by the program.

Step 2: Earn more than the Social Security taxable maximum for 35 years

This is where it starts to get much more difficult to qualify for the maximum Social Security benefit. Each year, there is a maximum amount of income that is subject to Social Security tax, known as the contribution and benefit base. In 2024, this is $168,600. For historical context, the contribution and benefit base was $137,700 in 2020 and $106,800 in 2010. It increases over time to keep up with inflation.

When determining your Social Security benefit, the SSA takes your annual earnings for your entire career, up to the contribution and benefit base, and then applies an indexation factor to adjust it for inflation. To maximize your Social Security benefit, you’ll need to earn more than your contribution and benefit base in at least 35 different years.

It’s also worth noting that certain years can make a difference. Even if you earn the taxable maximum in at least 35 years, your benefit may not be exact the maximum. For example:

• In 2000, the taxable maximum was $76,200. Applying the indexation factor of 1.9839990 shows an indexed earnings cap of $151,181 that can be used to calculate your benefit.
• In 2001, the taxable maximum was $80,400. Applying that year’s indexation factor of 1.9377706 gives an earnings cap of $155,797 that can be used in the benefit formula.

The point is that not every year the taxable maximum falls on the same number. Therefore, the combination of which 35 years in which you earned the most will determine exactly what your benefit will be.

Step 3: Wait until you turn 70 to start collecting benefits

Here is the final step. Qualifying Americans can start collecting Social Security as early as age 62, and the full retirement age (FRA) for people born in 1960 or later is 67. On the other hand, you can wait until age 70 to start collecting Social Security, and if you want the maximum benefits possible, that’s exactly what you’ll need to do.

Your Social Security benefit is permanently increased by 8% for each year you wait to claim after full retirement age until age 70. If your full retirement age is 67 and you wait until age 70, your benefit will be 24% higher than it would have been if you started collecting it at FRA.