Retiring early is becoming increasingly popular, and many early retirees claim Social Security early. After all, Social Security is the bedrock for most Americans’ retirement. Sadly, retiring early is NOT how you maximize your Social Security benefits.

In fact, retiring early significantly lowers your monthly benefit. Despite some common misconceptions, retiring early is now how you maximize your benefits. Instead, there is actually a strategic path to securing the highest possible benefit: $4,873 per month.

However, you’ll have to retire late and hit the maximum earnings cap for at least 35 years to get it. We’ll explore exactly how this works below.

1. Delayed Retirement

You must delay retirement if you want to maximize your Social Security benefits. This goes against a common misconception that retiring early allows you to receive maximum benefits over your lifetime. While it is true that you’ll receive benefits for more years, retiring early slashes your monthly check and potentially reduces your lifetime benefit.

Instead, the key is to delay retirement if you want to maximize your benefits.

For every month that you delay retirement, your monthly benefit increases. This continues until the age of 70 when your benefit is maximized. To receive as much as possible, you must delay retirement until 70. This step provides you with the biggest check you can possibly get based on your income.

2. Maximize Career Earnings

On top of retiring at the right age, you must also make the right amount of money. Remember, delaying retirement until 70 only maximizes your monthly benefits based on your income. If you want the maximum benefit possible, you must also maximize your income.

Social Security doesn’t simply average your total income over your working life. Instead, it focuses on your highest 35 years of earnings, adjusted for inflation to account for wage changes over time. These top-earning years have the greatest impact on your final benefit calculation.

However, there is a cap on how much extra income increases your Social Security check. This cap changes yearly, but in 2024, it is $168,600. Once you hit this income amount, you’ll no longer have to pay Social Security taxes, but you’ll also no longer receive credit for your extra income.

If you want to maximize your benefits, you must hit this income cap or go over it. Furthermore, the amount of time you work matters, too.

3. Work for 35 Years

You can’t hit the income cap once and call it quits. Instead, you need to hit this cap for 35 years.
When determining your monthly check, the Social Security Administration takes your top 35 earning years (adjusted for inflation) and averages them. It’s this average that needs to hit the cap.

Therefore, if you have a low income for 25 years and then barely hit the cap for 10, you aren’t going to maximize your benefits. Furthermore, if you only work for ten years, you aren’t going to maximize your benefit, either. Instead, you have to work for 35 years and make around the cap amount.

Additional Considerations

Maximizing your Social Security check is a worthy goal. After all, who doesn’t want the MAXIMUM amount of money in the mail each month? However, that doesn’t mean maximizing is a great choice for everyone.

As we discussed in our Why Not to Retire At 70 article, many people do not benefit from delaying retirement. If you have health problems, working longer is often not the best choice. Men also tend to have shorter lifespans than women, which can make delaying retirement much less fruitful.

Even if you receive the maximum amount of money by waiting until 70, you have to consider how long you’ll actually be able to enjoy retirement if you delay retirement by several years.

You must also consider the potential sacrifices required to reach the income cap. If you’re sacrificing your health and wellness for a higher income, is it really worth it? Sure, you might make more money in retirement, but how long will you be able to enjoy it if you’ve already racked up health problems on the way?

Is trudging through a job you don’t like for 35 years worth a decade with a few extra thousand dollars in your pocket?

Maximizing your finances may look good on paper, but it isn’t always the best choice for your whole person. It’s also important to consider the potential negatives to maximizing your Social Security income.

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