Maximizing Your Social Security Benefits: Key Strategies for Retirement

Unless you have several million dollars saved for retirement, Social Security will likely play a crucial role in covering your living expenses. While it would be ideal for this program to fully fund all your needs, many rely on it for only a portion of their costs. In January 2025, the average benefit for retired workers was just $1,979 per month.

Conversely, the highest earners benefit significantly more. In 2025, the maximum monthly benefit is capped at $5,108, which totals more than $61,000 per year. If you aspire to receive such generous payments in the future, it’s essential to start preparing now by aiming for specific salary benchmarks.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Image source: Getty Images.

Achieving Social Security’s Maximum Benefit Requires a High Income

To qualify for Social Security’s maximum checks, you need to earn at or above the taxable wage base for the year, which is $176,100 in 2025. This limit has fluctuated in the past and may rise in future years.

Since most individuals do not reach such earnings, the maximum benefit often remains out of reach. Nevertheless, increasing your income can still enhance your future benefits. Activities that raise your taxable income—like overtime work, launching a side business, or switching to a higher-paying job—can lead to improved Social Security payouts during retirement.

If you are among the fortunate who earn more than the taxable wage cap for 2025, remember that income over this limit does not affect your benefits since Social Security payroll taxes do not apply. However, you can still prepare for retirement by saving this surplus income in a retirement account or taxable brokerage account.

Consider Additional Strategies for Boosting Your Benefits

It can be discouraging to learn that the largest benefit may be unreachable due to your income. Fortunately, there are alternative strategies for maximizing your Social Security benefits, regardless of your earnings.

First, aim to work at least 35 years before retiring if possible. The Social Security Administration computes your benefits based on the average monthly income during your 35 highest-earning years. Although shorter employment histories can still lead to benefits, zero-income years included in your calculation can drastically reduce your payments, costing you thousands over your retirement.

You should also carefully select your claiming age to optimize your lifetime benefits. Full retirement age (FRA), when you can claim full benefits, is 67 for most workers today, although some can claim as early as 66.

Retiring before your FRA decreases your benefits, which can be cut by up to 30% if you start claiming at 62. This reduction is typically permanent. Conversely, if you delay your benefits beyond your FRA, your monthly payout may increase until age 70. Workers who wait until then can receive up to 32% more per check, and this is crucial for those aiming for the $5,108 maximum monthly benefit.

Determining Your Ideal Claiming Age

Selecting the right claiming age generally involves two factors: your financial situation and your life expectancy. Delaying Social Security may not be feasible if you lack alternative funding for living expenses.

If you anticipate a shorter life expectancy, claiming benefits early may provide you with a higher total payout. However, if you expect to live into your 80s or beyond, delaying your claim until FRA or even until 70 might yield a more substantial lifetime benefit.

It’s important to note that not all of these strategies may apply to you, and that’s perfectly fine. Focus on what you can control and continue to save for any additional retirement expenses on your own.

Uncovering the $22,924 Social Security Bonus

For many Americans, retirement savings are lagging. Yet, some lesser-known “Social Security secrets” could enhance your retirement income. For example, utilizing certain strategies could boost your benefits by as much as $22,924 annually. By learning how to maximize your Social Security, you could retire with increased confidence and peace of mind. To discover more about these strategies, simply click here.

View the “Social Security secrets” »

The Motley Fool has a disclosure policy.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.