To maximize the benefits from the Social Security program, individuals should aim to earn at least the annual taxable income ceiling for at least 35 years. The Social Security Administration uses the 35 highest-earning years to determine an individual’s eventual retirement benefit. It’s essential to reach or exceed the inflation-adjusted taxable income ceilings for at least 35 years to qualify for the program’s largest payouts.
The taxable income ceiling has increased over the years, from $37,800 in 1984 to $168,600 in 2024. The Social Security Administration stops collecting additional taxes once the earned income exceeds the annual cap.
Additionally, delaying the initiation of Social Security retirement benefits until age 70 can boost the eventual payments. The most anyone can earn this year if they claim at 67 years of age is $3,822, while anyone claiming at 62 will receive no more than $2,710 per month. The timing of the total collected amount may differ, but most people end up collecting about the same total amount as others with comparable work-based earnings.
It’s important to note that Social Security was never intended to be the sole source of retirement income. The average monthly Social Security payment is around $1,900, and less than 2% of participants are seeing monthly checks of over $4,000. Investing in retirement savings, such as an IRA, can provide a better return on one’s money and supplement Social Security benefits.
In conclusion, to maximize Social Security retirement benefits, individuals should aim to earn at least the annual taxable income ceiling for at least 35 years, delay claiming benefits until age 70, and supplement their retirement income with other savings and investments.
