From what the evidence shows, One of the biggest factors impacting your monthly Social Security benefit is when you decide to apply for benefits.
Most people become eligible for retirement benefits starting at age 62, in today's market environment.
Moreover, But claiming as soon as possible will result in a much smaller monthly check than if you wait, in today's market environment.
That's why many retirees wait until they reach their full retirement age, between the ages of 66 and 67 for most Americans.
But that title is a bit of a misnomer because you can get an even bigger monthly benefit by waiting until age 70 to file.
The discrepancy between how much you can receive from Social Security at each age is amplified when you look at the maximum possible benefit.
And if you aim to truly maximize your Social Security benefits for yourself and your family, there's a winner for which age is best for most people. Image source: Getty Images.
Additionally, What it takes to maximize your Social Security benefits When the Social Security Administration goes to calculate your monthly retirement benefit, it first looks at your entire earnings history, starting from the first year you started working and filed income taxes.
After adjusting each year's earnings for inflation, it selects the 35 highest-earning years and plugs them into the Social Security benefits formula (noteworthy indeed), given current economic conditions.
Market analysis shows data indicates that formula will have some slight variations depending on what year you were born, given the current landscape.
On the other hand, The year you were born will also determine your full retirement age. Anyone born between 1943 and 1954 reached full retirement age at 66.
It then increases by two months for each year you were born after 1954 until maxing out at age 67 for anyone born in 1960 or later.
Your full retirement age is important because that's when you'll receive the primary insurance amount calculated by the Social Security benefits formula (fascinating analysis), in today's market environment.
Furthermore, If you claim before you reach the required age, you'll receive a smaller monthly benefit (an important development).
If you wait, you'll receive an increase in benefits for each month you delay up until age 70. Additionally, There's one more detail to know how your benefit gets calculated, though.
Nevertheless, If you're a high earner, the Social Security Administration might not count every dollar you earned during your career when calculating your benefit.
That's because it caps the amount of earnings subject to Social Security taxes each year.
If you don't pay Social Security taxes on the income, it won't count toward your earnings for calculating your benefit. Here's the last 50 years of the maximum taxable earnings for Social Security.
On the other hand, Year Earnings Year Earnings 1976 $15,300 2001 $80,400 1977 $16,500 2002 $84,900 1978 $17,700 2003 $87,000 1979 $22,900 2004 $87,900 1980 $25,900 2005 $90,000 1981 $29,700 2006 $94,200 1982 $32,400 2007 $97,500 1983 $35,700 2008 $102,000 1984 $37,800 2009 $106,800 1985 $39,600 2010 $106,800 1986 $42,000 2011 $106,800 1987 $43,800 2012 $110,100 1988 $45,000 2013 $113,700 1989 $48,000 2014 $117,000 1990 $51,300 2015 $118,500 1991 $53,400 2016 $118,500 1992 $55,500 2017 $127,200 1993 $57,600 2018 $128,400 1994 $60,600 2019 $132,900 1995 $61,200 2020 $137,700 1996 $62,700 2021 $142,800 1997 $65,400 2022 $147,000 1998 $68,400 2023 $160,200 1999 $72,600 2024 $168,600 2000 $76,200 2025 $176,100 Data source: Social Security Administration.
Meanwhile, Note the maximum earnings subject to Social Security taxes increases every year with the rise in the standard of living and inflation.
As a result, you'll have to ensure your salary keeps up with the rising wage inflation over time.
Moreover, But if you can earn above the threshold for at least 35 years, you'll put yourself in line for a maximum or near-maximum possible Social Security benefit, in today's financial world.
Here's the maximum possible benefit at 62, 66, 67, and 70 Even if you max out your taxable earnings throughout your career for Social Security, there's still a huge gap in the monthly benefit you can receive at 62 versus waiting until age 70, in this volatile climate.
While claiming at 62 will allow you to collect benefits for longer, waiting until age 70 ensures you receive the biggest possible monthly benefit.
Splitting the difference at full retirement age can be a good commise for some, amid market uncertainty. Nevertheless, Here's what the maximum possible benefit looks for each of those ages in 2025.
At the same time, Retirement Age 62 66 67 70 Maximum monthly benefit $2,831 $3,795 $4,043 $5,108 Data source: Social Security Administration. The differences between the ages are substantial.
A 62-year-old and a 70-year-old who each earned similar amounts throughout their careers can receive significantly different amounts of Social Security each month if they claim at the same time.
In contrast, As you can see, the 70-year-old's max benefit is 80% higher than their 62-year-old counterpart's (an important development). Should you wait to claim benefits, in today's financial world.
If you're in line for the maximum possible Social Security benefit, you may be wondering if it makes sense to delay Social Security to increase the size of your monthly check, in this volatile climate.
In fact, high earners stand to benefit the most from waiting as long as possible before claiming their benefits, in today's financial world.
If you were fortunate enough to have a high-paying career, hopefully you've also set aside some of your earnings in personal retirement accounts.
Furthermore, If so, you won't be entirely reliant on Social Security for income in retirement, so waiting to claim your benefits can help tect your wealth later in life.
Meanwhile, If you were the main breadwinner in your household, you also need to consider survivor benefits (this bears monitoring).
Moreover, If you pass away before your spouse, they're eligible to collect the same amount you were receiving from Social Security before your passing (something worth watching), given current economic conditions.
As such, it's important to consider your spouse's life expectancy as well as your own when determining the best age to claim benefits.
Delaying until age 70 is usually the best option for maximizing total benefits paid.
Even if you haven't earned enough to receive the maximum possible benefit from Social Security, it often makes sense to wait until age 70 (which is quite significant), in this volatile climate.
As long as you can afford to delay your benefits, it will usually pay off with a more secure retirement.