How To Maximize Your Social Security Benefits

Many factors, including how much income you earned while in the workforce and at what age you started taking Social Security, determine your maximum monthly Social Security benefit. Generally speaking, the longer you can afford to wait before taking Social Security, the bigger your maximum benefit will be. But there are several other ways to help maximize your Social Security benefit as you plan for retirement.

  • Written by
    Lindsey Crossmier

    Lindsey Crossmier

    Financial Writer

    Lindsey Crossmier is an accomplished writer with experience working for The Florida Review and Bookstar PR. As a financial writer, she covers Medicare, life insurance and dental insurance topics for RetireGuide. Research-based data drives her work.

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    Savannah Pittle
    Savannah Pittle, senior financial editor for RetireGuide

    Savannah Pittle

    Senior Financial Editor

    Savannah Pittle is a professional writer and content editor with over 16 years of professional experience across multiple industries. She has ghostwritten for entrepreneurs and industry leaders and been published in mediums such as The Huffington Post, Southern Living and Interior Appeal Magazine.

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    Brandon Renfro, Ph.D., CFP®, RICP®, EA
    Brandon Renfro, RetireGuide Reviewer

    Brandon Renfro, Ph.D., CFP®, RICP®, EA

    Retirement and Social Security Expert

    Brandon Renfro is a Retirement and Social Security Expert and financial planner. He focuses on helping clients create a secure financial future in retirement and co-owns Belonging Wealth Management. He is also a former finance professor and writes for several publications.

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  • Published: May 18, 2022
  • Updated: June 6, 2023
  • 11 min read time
  • This page features 12 Cited Research Articles
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How to Cite RetireGuide.com's Article

APA Crossmier, L. (2023, June 6). How To Maximize Your Social Security Benefits. RetireGuide.com. Retrieved July 15, 2024, from https://www.retireguide.com/social-security/benefits/how-to-maximize-benefits/

MLA Crossmier, Lindsey. "How To Maximize Your Social Security Benefits." RetireGuide.com, 6 Jun 2023, https://www.retireguide.com/social-security/benefits/how-to-maximize-benefits/.

Chicago Crossmier, Lindsey. "How To Maximize Your Social Security Benefits." RetireGuide.com. Last modified June 6, 2023. https://www.retireguide.com/social-security/benefits/how-to-maximize-benefits/.

Key Takeaways
  • If you wait until you’re 70 to collect Social Security benefits, you will get a higher benefit amount than if you started collecting benefits at age 62 or your full retirement age.
  • Your benefit amount is calculated from your highest 35 years of earnings. Work a minimum of 35 years to maximize your benefit.
  • Continue working as you near retirement if you’re making a higher income compared to previous years. High income replacing lower earning years means a larger benefit for you.
  • Look into dependent, spousal and survivors benefits to see if you qualify for a higher benefit.
  • Make sure you don’t exceed earning or tax limits — otherwise your benefit amount could be reduced.

How Can You Increase Your Social Security Benefit?

There are multiple strategies to help you maximize your Social Security benefit. Three popular methods include waiting until you’re 70 to collect benefits, working for 35 years and earning a higher salary before retirement.

In 2023, many older Americans are still feeling the effects of high inflation. While the 8.7% cost-of-living adjustment (COLA) helps bridge the gap, it doesn’t always provide enough financial support for older adults to live comfortably. According to the Center on Budget and Policy Priorities, Social Security benefits only replace about 37% of past earnings.

3 Ways To Boost Your Social Security Benefit
Wait until you’re 70 to collect benefits
If you wait until you’re 70 to collect benefits, you get the maximum benefit amount. If you collect benefits at your retirement age or younger — your benefit will be less.
Work for 35 years
Your benefit amount is calculated from your highest 35 years of earnings. If you didn’t work for at least 35 years — your benefit amount will be lower.
Earn a higher salary
If you earn a higher salary, it will increase your highest 35 years of earnings, and your benefit amount will be higher.

You can also boost your benefit by receiving dependent, spousal or survivors benefits, being cautious about exceeding the earnings limit and minimizing your social security tax liabilities.

Learn how each tactic can help you maximize your Social Security benefit to avoid missing out on a higher payout.

Wait To Begin Collecting Benefits

If you collect your benefit early at age 62, your benefit will be reduced. If you wait until you’ve reached your full retirement age (FRA), you will get 100% of your benefit. But if you delay collecting your benefit until you surpass your FRA, your benefit amount increases each year.

Below is an example from a personalized Social Security statement showing how your FRA can affect your Social Security benefit amount. Remember that the statement is a personalized example — the information below won’t reflect your exact benefit amount.

How Waiting Until You’re 70 Maximizes Your Benefit
If you collect your benefits when you turn:Your benefit would be:
62$1,465
63$1,569
64$1,681
65$1,827
66$1,973
67$2,119
68$2,291
69$2,463
70$2,634

In the example above, the difference between collecting your benefit at 62 and 70 is $1,169. If you choose to start collecting benefits at 62 instead of 70, you could miss out on up to $140,280 of benefits within a 10-year span.

Work for 35 Years

Your benefit amount is based on your highest 35 years of earnings. If you haven’t worked for at least 35 years, your benefit amount will be reduced. Any years with no earnings will result in zeros.

Years with zero income will bring down your benefit amount.

Let’s say you’ve worked for 34 years in total. To raise your benefit amount, continue to work for one more year. That way, this year’s income will replace the zero in your work history, which will raise your benefit amount.

Earn a Higher Salary

If you’ve already worked for 35 years, your next step to maximize your benefit is earning a higher salary. Your benefits are calculated off your highest 35 years of earnings, so you can replace a lower earning year with a higher earning year if you continue working.

Say you had a $40,000 salary for 10 years and then an $85,000 salary for 25 years. You’ve already worked for 35 years but want to replace some of your lower earning years to boost your benefit.

You could take on a job with a $60,000 salary and work it for three years before you retire. As a result, your benefit will be calculated with your earnings history of $40,000 for seven years, $60,000 for three years and $85,0000 for 25 years.

Receive Dependent, Spousal or Survivors Benefits

If you have a young child, your spouse makes a higher income than you or if your spouse has passed away — you could qualify for a higher benefit. How each benefit type affects your payout varies, depending on what type of benefit you’re receiving.

How Dependent, Spousal and Survivors Benefits Can Boost Your Payout
Dependent Benefit
If you have a dependent under 18 years old (or 19 if they’re in school), they can receive up to 50% of your benefit. This amount will be added on top of your typical retirement benefit amount.
Spousal Benefit
If your spouse has a higher income than you, you can choose to receive spousal benefits to boost your benefit amount. You can receive up to 50% of your spouse’s benefit amount. Even if you’ve divorced your spouse, you can still qualify for benefits, as long as you haven’t remarried.
Survivors Benefit
If your spouse has passed away, but they were eligible for a higher payout than you were, you could qualify for survivors benefit. Survivors benefits are based on the deceased spouse’s work history — not yours. If you collect survivors benefits when you are at your FRA or older, you’ll receive 100% of your deceased partner’s death benefit.

Don’t Exceed the Earnings Limit

If you continue to work while receiving Social Security, your benefit amount could be reduced if you make above a certain earnings limit. What age you are determines if you have an annual earnings limit or not.

If you’re below your FRA and are collecting benefits, your annual earning limit is $21,240 in 2023. If you’re collecting benefits during the year that you reach your FRA, your earnings limit is $56,520. Any income earned above your limit will be reduced.

If you’re already your FRA or older, you have no earnings limit. You can earn as much as you’d like and face no reduction to your benefits.

To maximize your benefits, wait until you reach your FRA to earn above the earnings limit.

Minimize Your Social Security Tax Liabilities

Based on your earnings and tax filing status, up to 85% of your Social Security benefits could be taxable. To maximize your benefits, you could try to stay below the tax limits.

If you’re filing as single and your combined income is under $25,000 — your benefits won’t be taxed. If you’re filing a joint return and you and your spouse have a combined income under $32,000 — your benefits won’t be taxed.

If you make above the limits listed above, 50% or 85% of your Social Security benefits could be be taxable.

What Is the Maximum Social Security Benefit?

Your maximum benefit is the most money you can get from Social Security. If you choose to retire at your full retirement age (FRA), your maximum benefit amount is $3,627 in 2023.

However, not everyone has the same maximum Social Security benefit limit. The limit varies from person to person and is higher the longer you wait to start collecting Social Security benefits. If you wait to start collecting benefits until you turn 70, your highest maximum benefit available would be $4,555.

If you retire early and begin taking payments at 62, the most your monthly benefit can be is $2,572. If you want to maximize your Social Security benefit, collecting benefits early would be the wrong move, since it will lower your maximum benefit limit.

Social Security Maximum Benefit By Age
AgeBenefit
62$2,575
Full Retirement Age$3,627
70$4,555

While many elect to receive Social Security as soon as they are eligible, you end up leaving a lot of money on the table by retiring early. One of the easiest ways to maximize your monthly benefit amount is to hold off on taking Social Security for as long as financially possible.

To illustrate, the difference between taking the benefit when retiring early at age 62 and the maximum benefit when retiring late at age 70 equals more than $200,000 left on the table over the span of 10 years.

What Determines Your Maximum Benefit?

There are several factors that determine your maximum benefit. It should also be noted that, at minimum, you must earn 40 Social Security credits to qualify for any kind of benefit. In most cases, 40 credits equate to 10 years of work.

The two main areas that will impact your maximum benefit are your retirement age and your earnings history.

Full Retirement Age

Since your maximum benefit amount increases the longer you wait to retire, your age plays a major role in determining your maximum benefit. Your full retirement age varies depending on the year you were born.

FRA by Year of Birth
  • If you were born from 1943 to 1954
    Your full retirement age is 66.
  • If you were born from 1955 to 1960
    Your full retirement age will fall between 66 and 67, depending on the specific year.
  • If you were born in 1960 or later
    Your full retirement age is 67.

The closer you can get to your full retirement age before taking Social Security, the bigger your maximum benefit will be. Benefits will further increase if you wait past your full retirement age. But, unlike retirement age, there are other factors that are more difficult to control and can’t be decided at the last minute.

Earnings History

The income you earned while you were in the workforce plays a large role in determining your maximum Social Security benefit. Simply put, the higher your earnings, the higher your maximum benefit will be.

You achieve your maximum Social Security benefit by earning what is known as the maximum taxable income while in the workforce for up to 35 years. Your benefit is determined by analyzing your average indexed monthly earnings throughout your career, meaning your income is adjusted for inflation in the calculation. If you’ve worked more than 35 years, then the 35 years in which you made the most income will be used.

If you want to maximize your benefit, you can continue working as you collect benefits. If you’ve made a high income compared to previous years, your benefit amount will be adjusted to reflect your earnings.

In 2023, wages up to $160,200 are taxed by Social Security. You would have to earn at least this amount to be eligible for the maximum possible benefit at retirement.

Other Options for Income in Retirement

While Social Security serves as the base income for many older adults, it isn’t the only way that you can bring in money after you’ve retired and is not the only income avenue that you should consider when planning for retirement.

Alternative Income Options
Annuities
There are many types of annuities, but they typically involve either using a lump sum or paying into one over time, with your money then being converted into a stream of payments that can last through your retirement.

Annuities offer you another way to receive regular income after you retire — on top of your Social Security payments — and can help ensure you never outlive or outspend your savings.
Bonds
Bonds can provide you with an additional stream of income during retirement and can potentially provide tax benefits.
Saving Accounts and CDs
A savings account and certificate of deposit (CD) are both backed by the Federal Deposit Insurance Corporation and are great nest eggs to keep retirement funds protected and have them grow.
Continue Working
Instead of a full-blown career, you could focus on working occasionally or just a few hours a week, giving yourself an extra income boost without much stress. This path can also help bring some structure to your day-to-day life, which is often a major issue for new retirees.
Real Estate
If you own a separate property from your home or have the money to buy one, then renting it out could provide a consistent and hefty source of income throughout your retirement. A more low-impact way to get involved could be renting out a room or space in your home.
Reverse Mortgage
A reverse mortgage allows you to convert your home equity into a loan. You can receive the funds as a lump sum, or a steady stream of payouts over time. A reverse mortgage can also provide you with tax benefits.
Last Modified: June 6, 2023

12 Cited Research Articles

  1. Social Security Administration. (2023, January 3). What Is the Maximum Social Security Retirement Benefit Payable? Retrieved from https://faq.ssa.gov/en-us/Topic/article/KA-01897
  2. Social Security Administration. (2023). Contribution and Benefit Base. Retrieved from https://www.ssa.gov/oact/cola/cbb.html
  3. Social Security Administration. (2023). Disability Benefits | Family Benefits. Retrieved from https://www.ssa.gov/benefits/disability/family.html
  4. Social Security Administration. (2023). If You Are the Survivor. Retrieved from https://www.ssa.gov/benefits/survivors/ifyou.html
  5. Social Security Administration. (2023). Receiving Benefits While Working. Retrieved from https://www.ssa.gov/benefits/retirement/planner/whileworking.html
  6. Nesbit, J. (2022, October 13). Social Security Benefits Increase in 2023. Retrieved from https://blog.ssa.gov/social-security-benefits-increase-in-2023/
  7. Center on Budget and Policy Priorities. (2022, March 4). Policy Basics: Top Ten Facts About Social Security. Retrieved from https://www.cbpp.org/research/social-security/top-ten-facts-about-social-security
  8. Social Security Administration. (2013, September 25). Benefits for Spouses. Retrieved from https://www.ssa.gov/oact/quickcalc/spouse.html
  9. Financial Industry Regulatory Authority. (n.d.). Sources of Retirement Income. Retrieved from https://www.finra.org/investors/learn-to-invest/types-investments/retirement/managing-retirement-income/sources-retirement-income
  10. Social Security Administration. (n.d.). Income Taxes and Your Social Security Benefit. Retrieved from https://www.ssa.gov/benefits/retirement/planner/taxes.html
  11. Social Security Administration. (n.d.). Normal Retirement Age. Retrieved from https://www.ssa.gov/oact/progdata/nra.html
  12. Social Security Administration. (n.d.). Starting Your Retirement Benefits Early. Retrieved from https://www.ssa.gov/benefits/retirement/planner/agereduction.html