For many Americans social security benefits are an important source of income after retirement. According to the Social Security Administration, in 2021, an average of 65 million Americans received monthly Social Security benefits totaling more than $1 trillion paid during the year.
While the average retiree receives $1,557 per month in benefits, the maximum you can receive per month is $3,895, as GOBankingRates previously reported. However, how much you receive will depend on many factors.
Number of working years
How long have you worked? The Social Security Administration calculates your benefit amount by averaging your wages earned over the 35 highest-earning years of your career — adjusting for inflation over the years.
Thinking means that you must have worked at least 35 years in your lifetime, GOBankingRates reported, and times you weren’t working results in a lower average and less money.
To qualify for maximum benefits, you must have consistently had income equal to or greater than the SSA’s maximum taxable income limit throughout your career. For 2021, the maximum limit is $142,800 per year, although the amount changes annually to account for cost-of-living adjustments.
Even if you don’t consistently earn the maximum cap, note that you can still increase your benefits by increasing your income.
When you plan to apply for benefits
Another important factor is when you plan to apply for benefits. While you can claim Social Security benefits as early as age 62, waiting longer can save you more money. If you wait until your 70th, you have a better chance of receiving benefits. You can potentially collect hundreds of dollars more per month if you wait for at least $70.
But even if you were on track to maximize your benefit eligibility, by submitting at age 62, you would receive only $2,324 per month. Waiting 8 years makes a big difference.
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This article originally appeared on GOBankingRates.com: Social Security Eligibility: What It Takes to Receive Up to $3,895 Monthly