Are You on Track to Reach the $4,555 Max Social Security Benefit?

Here's a wake-up call for you: The average monthly Social Security retirement benefit was $1,835 as of April, 2023. That's only about $22,000 per year. If you don't think you'll be able to live comfortably on that in retirement, you're probably right.

There's some good news and bad news related to Social Security benefits: The good news is that, unless you're claiming your benefits in the very near future, you have the power to make them bigger. Indeed, the maximum monthly benefit is currently $4,555 -- close to $55,000 annually. That's much better than $22,000. The bad news is that it's rather difficult and probably impossible for most of us to attain that benefit.

Image source: Getty Images.

Still, even you miss that high mark, you may be able to fatten your benefit checks considerably. Read on to learn what's needed to qualify for the maximum checks.

1. Work for at least 35 years

For starters, you'll need to work for at least 35 years and have an earnings history tracked by the Social Security Administration (SSA) that encompasses at least 35 years. Why 35? Well, the formula used by the SSA to calculate your benefits averages your earnings over the 35 years in which you earned the most (adjusting each year's sum for inflation, of course). So if you only work for 30 years, there will be five zeroes factored into the equation, reducing your benefits. Even falling short by one year will disqualify you for that maximum $4,555 benefit.

Here's a tip, though: If you have 35 years in the bank and are earning more, on an inflation-adjusted basis, than you have in the past, each additional year you work will kick out your lowest-earning year, boosting your average earnings (and therefore your ultimate benefits).

2. Earn the maximum for 35 years

If you're feeling great because you have or will have 35 years of solid earnings in your record, that's terrific, but it may not qualify you for that $4,555 benefit -- because you have to earn at least a certain amount in each of those 35 years that get counted.

There's a certain maximum amount that counts for benefit calculations each year -- often referred to as your maximum taxable earnings, because Social Security only taxes your earnings up to that level. For 2023, that sum is $160,200 (up from $147,000 in 2022). The sum changes just about every year -- it was $118,500 back in 2015. So if you earn $160,200 in 2023 and your neighbor earns $1,160,200, you'll both pay the same tax into Social Security's coffers.

Meanwhile, to qualify for the big $4,555 benefit check, you'll need to have earned at least $160,200 in 2023, at least $147,000 in 2022, at least $118,500 in 2015, and so on. There's a good chance that you have not earned the maximum taxable earnings in each of your 35 years of work -- and that's another disqualifier.

3. Delay claiming your benefits until age 70

If you have earned the maximum amount for all 35 years (or you will, before you retire), your eligibility for the maximum Social Security benefit is looking pretty good -- you have just one more hurdle.

Know that each of us has a "full retirement age" at which we can start collecting the full benefits to which we're entitled based on our earnings history. For most of us, that age is 66 or 67. We can actually start collecting our benefits as early as age 62, though. If you do, your benefit checks will be smaller -- but you'll collect many more of them. Delaying beyond your full retirement age will beef up your benefit checks by about 8% for each year until age 70.

The following table shows the effect of starting the checks rolling in sooner vs. later:

Data source: Social Security Administration. 

The $4,555 maximum benefit assumes that you do delay collecting your benefit checks until age 70, so that's the last necessary thing you need to do to qualify. Delaying until age 70 is a smart move for millions, including those with no chance of getting those $4,555 checks -- though starting early makes sense for many, as well. The decision of when to start Social Security depends on factors such as your retirement-readiness and your expected longevity.

If you've arrived at the conclusion that the maximum $4,555 benefit is out of reach for you, don't despair. It's out of reach for most of us -- but it's still possible to increase the benefits you'll collect in the future -- by tactics such as beefing up your income and delaying claiming your benefits -- and doing so can be well worth it.