There’s a big difference in how much you can take home by waiting just four more years.
A bigger Social Security benefit check can go a long way in retirement. Around half of all retirees 65 or older receive at least 50% of their household income from the government benefits program, according to survey data compiled by the Social Security Administration (SSA).
Although many retirees in line for the maximum Social Security benefit might be planning to claim when they reach full retirement age in 2024, that might not be the best decision. Even if you earn enough in your career to maximize your Social Security benefits, there’s still a huge difference in the amount you’ll receive at age 66 — which is near full retirement age for those reaching it in 2024 — and 70, when you’ll max out your monthly benefits check.
How much do you have to earn to receive the maximum possible Social Security benefit?
The first step to receiving the maximum Social Security benefit for any age is to consistently earn a high income throughout your career.
When the SSA calculates your monthly benefit, it takes your 35 highest-earning years (adjusted for inflation), and it averages out those 35 years and plugs the number into a formula that determines your primary insurance amount (PIA). That’s how much you’ll receive if you claim your benefits at your full retirement age, which is between 66 and 67, depending on the year you were born.
Importantly, the SSA puts a cap on the earnings it counts toward Social Security wages, and it calls that cap the contribution and benefit base. The amount is adjusted for inflation every year, and it’s $168,600 in 2024.
Earning above the contribution and benefit base for 35 years in your career will put you on a path to receiving the maximum possible Social Security benefit. Here are the earnings caps for the last 50 years:
| YEAR | EARNINGS | YEAR | EARNINGS |
|---|---|---|---|
| 1973 | $10,800 | 1999 | $72,600 |
| 1974 | $13,200 | 2000 | $76,200 |
| 1975 | $14,100 | 2001 | $80,400 |
| 1976 | $15,300 | 2002 | $84,900 |
| 1977 | $16,500 | 2003 | $87,000 |
| 1978 | $17,700 | 2004 | $87,900 |
| 1979 | $22,900 | 2005 | $90,000 |
| 1980 | $25,900 | 2006 | $94,200 |
| 1981 | $29,700 | 2007 | $97,500 |
| 1982 | $32,400 | 2008 | $102,000 |
| 1983 | $35,700 | 2009 | $106,800 |
| 1984 | $37,800 | 2010 | $106,800 |
| 1985 | $39,600 | 2011 | $106,800 |
| 1986 | $42,000 | 2012 | $110,100 |
| 1987 | $43,800 | 2013 | $113,700 |
| 1988 | $45,000 | 2014 | $117,000 |
| 1989 | $48,000 | 2015 | $118,500 |
| 1990 | $51,300 | 2016 | $118,500 |
| 1991 | $53,400 | 2017 | $127,200 |
| 1992 | $55,500 | 2018 | $128,400 |
| 1993 | $57,600 | 2019 | $132,900 |
| 1994 | $60,600 | 2020 | $137,700 |
| 1995 | $61,200 | 2021 | $142,800 |
| 1996 | $62,700 | 2022 | $147,000 |
| 1997 | $65,400 | 2023 | $160,200 |
| 1998 | $68,400 | 2024 | $168,600 |
DATA SOURCE: SOCIAL SECURITY ADMINISTRATION.
Here’s the maximum possible Social Security benefit at ages 66 and 70
In 2024, 66 is an important age for retirees. Those born in 1957 and 1958 will reach their full retirement age a few months after reaching 66. Those born in 1957 will reach full retirement age at 66 and 6 months (if they haven’t already), and those born in 1958 will have to wait until age 66 and 8 months.
You can claim as early as 62, but you’ll receive less than your PIA if you claim before reaching full retirement age. On the other hand, if you delay taking benefits past full retirement age, you’ll receive a small increase in your monthly check for each month you forgo your benefits, up until they max out at age 70.
As such, it’s important to look at the difference between the maximum monthly benefit at 66 and 70 in 2024.
The maximum benefit for those who claim Social Security the month they turn 66 in 2024 is $3,652 per month. That’s $43,824 in annual income, which can go a long way toward a more enjoyable retirement. But consider the amount that leaves on the table.
The maximum monthly benefit for those claiming at 70 in 2024 is $4,873. That adds up to $14,652 more per year than a 66-year-old would get. That could pay for some nice vacations every year.
There’s an important caveat. The 70-year-old in 2024 received an extra 8 months’ worth of delayed retirement credits because someone born in 1954 reached full retirement age right at their 66th birthday. Meanwhile, persons claiming at 66 this year will see a 4.4% reduction in their primary insurance amount because they’re technically claiming before reaching full retirement at age 66 and 8 months.
That disparity will move closer over time as anyone born in 1960 or later won’t reach full retirement age until 67. Nonetheless, any retirees, regardless of whether they’re claiming the maximum possible benefit, will see their monthly benefit increase by more than 30% by waiting from age 66 until age 70.
Is it worth waiting until 70 in 2024?
If you earned enough to maximize Social Security benefits, you likely earned enough to set aside a good amount for retirement as well. As such, you can likely afford a nice retirement on your personal savings alone.
Nonetheless, you might be tempted to claim benefits when you reach full retirement age in 2024. You might think that claiming early allows you to leave more of your money invested and have more to pass on to your heirs or give to charity.
But someone turning 66 in 2024 can receive a guaranteed 7% real compound annual growth rate on their monthly benefit check by delaying until age 70. The S&P 500, by comparison, averages just a 6.5% real compound annual growth rate, and it’s far from guaranteed.
As such, if you’re in a position where you can afford to delay claiming Social Security until 70, it pays to do so more often than not.
