Your Social Security benefit in retirement can vary significantly depending on several factors, including your earnings, work history, and when you file for benefits. If you’re aiming for the maximum Social Security payment of $4,873 in 2024, there are key steps you need to take throughout your working years and into retirement. Even if you don’t reach high-income levels, there are strategies to increase your payment and ensure financial stability.
Work
The Social Security Administration (SSA) calculates your benefits based on your highest-earning 35 years of work. If you don’t work for at least 35 years, each year below that threshold is calculated as $0, which will reduce your average earnings and, consequently, your monthly benefit.
By working for a full 35 years, you can ensure that you avoid having $0 earnings years factored into your benefit calculation. Consistency in earnings across those 35 years plays a major role in boosting your Social Security payments.
Delay
If you want to receive the maximum possible benefit from Social Security, delaying your retirement until age 70 is crucial. While you can start collecting Social Security benefits as early as age 62, this will result in a reduction of up to 30%. On the other hand, if you delay beyond your Full Retirement Age (FRA)—which is typically around age 66 or 67—you’ll earn delayed retirement credits, increasing your benefits by 8% per year until age 70.
This strategy maximizes your monthly payment, allowing you to receive $4,873 if you meet the necessary income and work history requirements.
Taxable Maximum
To qualify for the largest Social Security payment possible, you must earn at or above the taxable maximum during your working years. In 2024, the taxable maximum is set at $160,200. Only income up to this limit is subject to Social Security payroll taxes, and the more you earn up to this threshold, the higher your benefits will be.
To achieve the maximum payout of $4,873, you need to have earned the taxable maximum for at least 35 years. This ensures that your highest-earning years are calculated into your benefit, significantly boosting your monthly payments.
Taxes
Only jobs that require you to pay into Social Security count toward your benefits. Some government and nonprofit jobs may not contribute to Social Security, which could reduce your benefit eligibility. Ensure that all or most of your jobs over your working years are covered by Social Security taxes to maximize your benefits.
SSA Rules
It’s essential to follow the SSA’s rules regarding eligibility and income reporting to ensure your benefits are not reduced. For instance, if you continue working while receiving benefits and are under Full Retirement Age, your income may be subject to earnings limits, which can temporarily reduce your monthly payments. By following SSA guidelines, you can avoid reductions and penalties.
Payment Amounts
If you’re not able to or don’t want to work until age 70, you still have options to receive substantial Social Security payments.
Full Retirement Age (FRA)
At Full Retirement Age (typically 66-67), you’re eligible for 100% of your Social Security benefits. High earners who retire at FRA could receive up to $3,822 monthly in 2024. This is a significant amount, though it’s lower than the delayed benefits available at age 70.
Early Filing at Age 62
For those who prefer to retire early at age 62, it’s possible to start collecting Social Security benefits. However, doing so comes with a reduction of up to 30%. Even high earners will only be able to receive up to $2,710 per month if they file at 62. While early filing offers more free time, it’s important to weigh the trade-off between reduced benefits and the financial security that comes with delaying your claim.
Payment Dates
If you’re already collecting Social Security, here are the upcoming payment dates for September 2024:
- September 18: For those whose birthdays fall between the 11th and 20th of any month.
- September 25: For those whose birthdays fall between the 21st and 31st of any month.
If you’ve already received your September payment, your next check or direct deposit will arrive in October 2024.
Maximizing your Social Security benefits requires careful planning, especially if you want to reach the maximum payment of $4,873 in 2024. By working for 35 years, earning the taxable maximum, delaying your filing to age 70, and ensuring you pay Social Security taxes, you can set yourself up for financial success in retirement. If you prefer to retire earlier, filing at Full Retirement Age or age 62 still provides a significant payment, though at reduced rates.
FAQs
How can I get the maximum Social Security payment in 2024?
To receive the maximum benefit of $4,873, you need to work for 35 years, earn the taxable maximum, and file for benefits at age 70.
What is the taxable maximum for Social Security in 2024?
The taxable maximum for 2024 is $160,200. Earnings above this amount are not subject to Social Security taxes.
What happens if I file for Social Security at age 62?
If you file at 62, your benefits will be reduced by up to 30%, and the maximum payment you can receive is $2,710.
Can I increase my Social Security benefits by delaying retirement?
Yes, for every year you delay past Full Retirement Age (up to age 70), your benefits increase by 8%.
What is the maximum benefit at Full Retirement Age?
The maximum payment at Full Retirement Age in 2024 is $3,822.
