3 Steps to Take to Collect the Max Monthly Social Security Check in Retirement

Key Points

• The keys to maximizing your Social Security benefit are to earn a good salary, work more years than most people do, and wait as long as possible to claim.

• Even if you’re never going to qualify for the biggest-possible Social Security payment, maximizing your future benefit also helps in another important way.

• The $23,760 Social Security bonus most retirees completely overlook ›

For most people, Social Security isn't (or isn't going to be) a huge source of retirement income. The Social Security Administration reports this year's average monthly payment is only $1,976. That's nice to have, but certainly not enough by itself to comfortably live on. You need to bolster this income.

There are a few people, however, who are collecting the surprisingly big maximum-possible Social Security payment of $5,108 per month. That's measurably more than the average of $1,976.

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What did this small crowd do differently than most people that you can do for yourself now? Here are the three things that impact the amount of everyone's eventual Social Security retirement benefits, and what you can do to maximize your future payments.

Image source: Getty Images.

1. Earn a sizable taxable salary

Although the program was designed to ensure that all U.S. workers have at least some income in retirement, obviously Social Security doesn't distribute its benefits equally to all recipients. The more you put into the program's general fund -- in the form of FICA taxes -- while you're working, the more you get back once you begin withdrawing from it. Ergo, the more you earn in taxable wages in your working years, the bigger your eventual payback.

The program does draw a line though, limiting the amount of your income that it taxes. Since there would be no additional benefit to you by doing so, for tax-year 2025 Social Security stops taxing income above and beyond $176,000. This number is of course adjusted upward every year, mostly reflective of inflation.

The table below shows these taxable-income caps every year going back to 2015, although you can mentally extrapolate the trend going much further back.

Data source: Social Security Administration

So what? The small number of people cashing the biggest-possible monthly Social Security checks of $5,108 today earned at least these amounts in each of these years, in addition to earning inflation-adjusted comparable amounts in the years before the table begins. In fact, they earned sizable taxable incomes in more years than most people work at all. Keep reading.

2. Plan on working for (at least) 35 years

The small crowd collecting big Social Security payments today didn't just earn really good money for a few years. They earned good money at their jobs for a lot of years -- at least 35, in fact, if not more. See, for the purpose of determining your monthly payment, the Social Security Administration looks at your 35 highest-earning years (relative to each and every year's aforementioned threshold).

But you only earned wages for 25 years? That's OK. You can still collect. You'll simply be assigned an amount of zero dollars for the 10 years less than 35 that you earned work-based income. You worked 40 years? Great, but you're still only getting credit for 35 of them.

It still might make sense to work more than 35 years though, if your current earnings meet or exceed Social Security's maximum-taxable earnings threshold while your other years didn't. Again, the program considers your best (relative) 35 years whenever they occurred when calculating your benefit. These 35 years don't even have to be continuous years, either.

Of course, working for at least 35 years isn't necessarily easy. You may need to somewhat pace yourself as well as map out a career that allows for this sort of longevity.

3. Wait until you turn 70 to claim benefits

Finally, even if they officially or effectively retired before reaching this age, the people collecting the maximum Social Security checks today didn't actually claim their benefits until after they turned 70. Doing so before then would have resulted in smaller payments even if both of the other aforementioned requirements had been met.

And you've got a wide range of choices to be sure. While anyone claiming at their full retirement age of between 66 and 67 (depending on when you were born) will receive 100% of their intended benefits, you can claim as early as the age of 62. It's just that doing so will reduce the size of your monthly benefits by up to 30%.

Conversely, for today's and future retirees, waiting until you turn 70 to file for benefits increases them by up to 24% per month above and beyond what you would have received if claiming at your full retirement age. You can also claim at any point between those two extreme ages, of course, with an appropriately scaled adjustment being made to your payment.

Whatever the case, even if it means a couple of lean years with a part-time job between the time you retire and the time you actually file for benefits, waiting to claim can only help.

The cool part about these increased and decreased payments? Statistically speaking, they provide a fair and equitable lifetime benefit to every beneficiary. It's just that recipients are spreading out their net benefits over more years, or compressing them into fewer years. Assuming you live the average lifespan for retirees, you'll come out about the same either way. Waiting just allows you to enjoy bigger payments later in life.

Only part of a bigger financial plan

This is certainly much for future retirees to think about, even if it's a little too late to do everything you can about it. Even if you know you're not going to qualify for the maximum monthly payment of $5,108, doing more now to beef up your benefits will at least move you closer to that number when the time comes. Something is better than nothing.

Just don't lose sight of the bigger picture here. That is, Social Security was never intended to be the entirety of your retirement income in the first place. You can and should save for retirement on your own; you'll likely achieve a better return on your own investments than the effective return on the money the program is taking out of your paycheck anyway.

Of course, making a point of maximizing your Social Security benefits will also give you more time and more income to grow your own retirement nest egg.

The $23,760 Social Security bonus most retirees completely overlook

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