3 steps to get the maximum $3,895 social security benefit each month
THE average pensioner on social security benefits gets $1,543 a month in 2021 - but future retirees can more than double their payouts.
In fact, by planning ahead, you can collect a monthly benefit of $3,895 - the maximum available in 2021.
The maximum amount is up by $55 compared to last year, when the same figure was $3,840.
Social security benefits are given to the elderly to support them in retirement, and disabled Americans to help with extra living costs.
Nearly nine out of 10 individuals aged 65 and older receive social security benefits, and they make up around 33% of the income of the elderly.
Below we explain three steps to get the maximum social security benefit.
What are social security benefits?
SOCIAL security payments are made to retirees and their families, as well as to disabled people and their families.
But crucially, you have to have worked and paid into the Social Security scheme for long enough to get these benefits.
Survivors benefits are also paid to the families of workers who have died.
Social Security payments are funded through taxes taken under the Federal Insurance Contributions Act (FICA) or the Self-Employment Contributions Act (SECA).
Here's how to apply for Social Security.
1. Boost your earnings
The social security system isn't universal - instead, your future benefits will depend on your earnings history, among other factors.
In other words, the more money you earn, the higher your benefit will be.
To get the maximum social security benefit, you'll need to earn the maximum wage that's subject to social security taxes.
The maximum wage cap is $142,800 in 2021, but it changes each year and is up from $137,700 in 2020.
In other words, as long as you earn $142,800 this year and others, you'll set yourself up to get the maximum retirement benefit in future.
Once your earnings exceed that wage cap, you also don't get taxed on it for social security.
Workers pay 6.2% in tax on their earnings towards the social security system and employers match this amount until the wage cap is hit.
If your income isn't high enough for the wage cap, keep in mind you can also count extra income made from side hustles towards it.
Either way, the higher income you have in your career, the more you'll benefit in retirement.
2. Work at least 35 years
Your career may last way longer than 35 years, but it's only your highest-paid 35 years that count towards calculating your social security benefit.
It means it's important to work a full 35 years, even if you're a higher earner.
Otherwise you'll have $0 in earnings factored into your benefits calculation for each year you're missing an income.
This would leave you with a lower monthly benefit in retirement.
To get the maximum social security benefit, you need to hit the maximum wage cap for 35 years.
3. Delay your claim
Even if your yearly income exceeds the wage cap, that's not enough to get the highest possible monthly benefit.
To get it, the third step is to delay your claim beyond full retirement age (FRA), which is when you can claim your benefit in full.
If you were born in 1960 or later, that age is 67. For others, it's 66 and a specific number of months.
You can check your retirement age on the Social Security Administration website.
For each year you delay your social security benefit claim past your full retirement age, your benefits grow by 8%, up until the age of 70.
After this, you can't get any more delayed retirement credits.
If you can hold off until the age of 70, you might get $3,895 a month, based on 2021 figures.
In comparison, the maximum monthly benefit in 2021 for someone who starts to collect payments at the age of 62 is $2,324.
It then rises to $3,148 if you're 66 and two months.
Collecting the maximum amount requires planning, but the three steps will at the very least help you get a higher benefit for life.
Most read in Money
We reveal a simple trick that can boost your social security payments by $600.
Read More on The US Sun
We also explain 20 ways to live comfortably off your social security checks.
Meanwhile, elderly on social security benefits could get a huge raise next yea - here's why.