The Maximum Social Security Benefit is set to Increase in 2025, Yet Maintaining Compliance with the Identical Essential Criteria Remains Crucial for Eligibility
The Social Security program's peak benefit will hit an unprecedented $5,108 per month in 2025, making it the first time any retiree gets more than $5,000 per month from the program. However, only a small percentage will draw near to this amount.
Receiving the utmost Social Security benefit in any given year involves fulfilling three essential prerequisites. Although it appears straightforward, achieving this becomes progressively more challenging each year. If you're a worker or a recent retiree pondering the likelihood of collecting the largest payments, follow these steps:
1. Work for at least 35 years
To qualify for the maximum Social Security benefit, you need to work for a minimum of 35 years before retiring. The government uses your average monthly wage during your 35 highest-earning years, adjusted for inflation, to calculate your benefit. The outcome is your average indexed monthly earnings (AIME).
Although you can collect Social Security with as little as 10 years of work history, aim for 35 if possible. Those who don't meet the 35-year requirement include zero-income years in their benefit calculations. Even one zero-income year significantly decreases your AIME.
For example, if you earned $60,000, adjusted for inflation, every year for 35 years, your AIME would be roughly $2,311 per month based on the 2025 Social Security benefit formula. However, with only 34 years of work history, you'd get $2,265 per month – a loss of $46 each month, or over $11,000 over 20 years.
2. Pay the maximum amount of Social Security taxes in all 35 years
The individuals receiving the most significant Social Security payments pay the most in Social Security taxes throughout their careers. To maximize your benefit, you must earn the maximum income subject to Social Security taxes in each of your 35 highest-earning years.
In 2025, this means earning at least $176,100. However, in prior years, this limit was less. In 2024, for example, you only needed to earn $168,600. The ceiling on income subject to Social Security taxes is likely to rise due to inflation in future years.
Most people can't earn enough, which is why the average Social Security benefit in 2025 is only about $1,976 per month for retired workers. Boosting your income – through overtime, a better-paying job, or a side hustle – can lead to increased Social Security benefits in retirement.
3. Delay applying until age 70
You can apply for Social Security retirement benefits as early as 62, but doing so before your full retirement age (FRA) leads to a deduction. This age ranges from 66 to 67, depending on your birth year. Specifically, you lose 5/9 of 1% per month for up to 36 months of early claiming. If you start even earlier, you lose another 5/12 of 1% per month.
You can also delay Social Security past your FRA, and your checks will increase by 2/3 of 1% per month until you reach 70. At this point, you qualify for your maximum benefit. However, not everyone should delay applying. Those with health issues may not live long enough to justify the delay, and retirees with limited savings may need to claim early to cover expenses. Still, delaying is an option worth considering if feasible as it often results in larger lifetime benefits for most workers.
To effectively maximize your retirement income from Social Security, it's essential to consider saving and investing additional funds beyond the program. This strategy can complement your primary source of income from Social Security and help ensure a financially secure retirement.
Furthermore, as you approach retirement, think about diversifying your retirement savings to mitigate risks associated with relying solely on Social Security. Prudently allocating your money among various financial instruments can help provide a more stable income stream during your retirement years.
