The average monthly Social Security payment for retirees was $1,564 in November 2021. But many retirees receive over $3,000 per month from the Social Security Administration, and payments could be as much as $4,194 in 2022.
The maximum possible Social Security benefit in 2022 depends on the age you begin to collect payments and is:
-- $2,364 at age 62.
-- $3,345 at age 66 and 4 months.
-- $4,194 at age 70.
However, qualifying for payments worth $3,000 or more requires some serious career planning throughout your life. Here's what you need to do to qualify for the maximum possible Social Security payment.
Start Social Security Payments at Age 70
The maximum Social Security benefit changes based on the age you start your benefit. Those who postpone claiming Social Security between ages 62 and 70 become eligible for higher payments with each month of delay.
For example, someone who signs up for Social Security at full retirement age in 2022, which is 66 and four months for people born in 1956, could be eligible for as much as $3,345 per month. A person who claims payments at age 62 in 2022 has a smaller maximum possible benefit of $2,364 monthly. Only those who delay claiming past full retirement age are eligible for Social Security payments of significantly more than $3,500 per month. A high earner who enrolls at age 70 could get a maximum Social Security benefit of $4,194 each month.
Consistently Earn a High Salary
You will need to maintain a high income throughout your career to qualify for large Social Security payments in retirement. In recent years, you need to earn a six-figure salary to get a top Social Security payment.
The maximum wage taxable by Social Security is $147,000 in 2022. However, the exact amount changes each year and has increased over time. It was $137,700 in 2020 and $106,800 in 2010. Back in 2000, the taxable maximum was just $76,200. Only $39,600 was taxed by Social Security in 1985.
Workers pay 6.2% of their earnings into the Social Security system, and employers match this amount until their salary exceeds the taxable maximum amount of income for that year. Those who have salaries larger than the taxable maximum do not pay Social Security taxes on that income or have those earnings factored into their future Social Security payments.
"In order to receive the maximum Social Security benefit, you would need to earn at least the maximum Social Security wage base for at least 35 years in your career," says Jim Blankenship, a certified financial planner for Blankenship Financial Planning in New Berlin, Illinois, and author of "A Social Security Owner's Manual." "The figure is adjusted each year based on changes to the national average wage index."
If you earn more than the taxable maximum amount in a single year, you won't have to pay Social Security taxes on that income. However, that income also won't be used to calculate your Social Security payments.
Earn the Social Security Taxable Maximum for 35 Years
You need to earn at least the taxable maximum each year for 35 years to get the maximum possible Social Security payment. If you don't work for 35 years, zeros are averaged into your calculation and will decrease your Social Security payments.
"Whether because of a layoff or choosing not to work, these years of low or no income will ultimately impact the benefit you receive," says William Meyer, founder of Social Security Solutions, a company that analyzes Social Security claiming strategies. "If you are laid off, find a part-time or lower-wage job, even if it's temporary. Your earnings will likely count toward your future benefit and will prevent a zero from being used in the calculation."
If you work for more than 35 years, a higher-earning year will replace a year when you earned less in the Social Security calculation. You can increase your Social Security payments even after you retire if you earn more now than you did earlier in your career.
"Your benefits, after inflation, will keep rising if you work past 60 because of Social Security's annual recomputation of benefits," says Laurence Kotlikoff, an economics professor at Boston University and co-author of "Get What's Yours: The Secrets to Maxing Out Your Social Security." "You can be 100, earn above the ceiling, and the next year you'll get a real benefit hike."
The Maximum Social Security Family Benefit
Certain family members may be able to receive additional payments based on your work record. For example, a spouse qualifies for spousal payments worth up to 50% of the higher earner's benefit at full retirement age, if that is worth more than the payment based on his or her own work record. So, if one spouse has a Social Security payment of $3,345 per month at full retirement age, the other spouse might qualify for a spousal payment of up to $1,672.50 monthly. And after you pass away, your spouse could receive a survivor's payment of the full $3,345 per month, which would also be adjusted annually for inflation.
Children who are under age 19 or disabled may also qualify for benefits based on your work record. The maximum family benefit all your family members can receive is usually about 150% to 180% of your full retirement benefit. A divorced spouse can additionally claim benefits based on your work record, but it will not impact the amount you and your current family members receive.