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Are You Eligible for the $3,895 Max Social Security Benefit? | The Motley Fool

Social Security benefits can go a long way toward helping you enjoy a more comfortable retirement, especially if your personal savings are falling short.

The average retiree receives around $1,557 per month in benefits, according to the Social Security Administration. The maximum amount you can receive, however, is $3,895 per month.

How much you’ll receive in benefits depends on several factors, and there are a few questions you can ask yourself to determine whether you’re on track to earn the maximum $3,895 per month.

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1. How long have you worked?

One of the biggest factors when it comes to the size of your monthly checks is the length of your career. The Social Security Administration calculates your basic benefit amount by taking an average of your wages over the 35 highest-earning years of your career. That average is then run through a complex equation to account for adjustments in inflation over the decades.

To receive the maximum benefit amount, you’ll need to have worked and paid Social Security taxes for at least 35 years. If you’ve worked fewer than 35 years, the Social Security Administration will include zeroes in your average for the time you weren’t working. Those zeros will result in a lower average and less money in benefits.

2. How much have you earned throughout your career?

Working for at least 35 full years is only the first step of the equation when trying to reach the maximum benefit amount. The next step is to determine how close you are to the maximum taxable earnings limit, which is the highest income that’s subject to Social Security taxes.

In 2021, this limit is $142,800 per year, but it changes from year to year to account for cost-of-living adjustments. Thiry-five years ago, for example, the limit was $42,000 per year. To earn the maximum benefit amount, you’ll need to have been consistently reaching these limits throughout your career.

That said, even if you aren’t earning $142,800 per year, increasing your income even slightly can boost your benefit amount. If you’re able to create a source of passive income, for instance, that can go a long way toward collecting a higher monthly payment.

3. When do you plan to file for benefits?

The last factor to consider is the age you plan to begin claiming Social Security benefits. You can file for benefits as early as age 62, or you can wait beyond that age to earn larger checks. The longer you wait to file (up until age 70), the more you’ll receive each month.

Delaying benefits isn’t the best choice for everyone, especially those who are eager to get a jump-start on retirement. However, by waiting until age 70, you could collect hundreds of dollars more each month.

In fact, even if you are on track to earn the maximum benefit amount, if you were to claim at age 62, the most you could receive is $2,324 per month. In order to receive the maximum $3,895 per month, you’ll need to wait until age 70 to file.

Small decisions can make a big difference in your benefit amount

In reality, most workers won’t be able to achieve the maximum $3,895 benefit amount, and that’s OK. By taking small steps, you can earn more than you may think.

If you can’t work a full 35 years, for example, try to work as long as possible or find ways to increase your income before you retire. Picking up a side hustle or creating a source of passive income can result in more money in benefits, even if you’re not reaching the maximum earnings limit. And by delaying benefits by even a year or two, you can receive more each month.

Social Security benefits can make for a more financially secure retirement, so it’s wise to make the most of them. Whether you’re able to reach the maximum benefit amount or not, taking steps to boost your benefits can result in a happier retirement.


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