Social Security Benefits and What You Can Do to Maximize Them
Social Security has recently hit a significant milestone. By May 2025, the average monthly benefit surpassed $2,000 for the first time. This equates to around $24,000 annually for the average retiree. While that might sound substantial, anyone who’s tried to live on that amount knows it can be quite limiting.
However, if you’re aware of the elements that can influence your benefit amount, there are ways to improve it. If you haven’t signed up yet, consider these three factors:
1. Aim to Work for at Least 35 Years Before Applying
The Social Security Administration calculates benefits based on your average monthly income over your highest 35 earning years, adjusted for inflation. Now, you only need a decade of work history to qualify, but if you can, waiting until you’ve reached 35 years is advisable. Applying earlier means your earnings—including zeros for those non-working years—are factored into the calculation, which could lower your check for good.
That said, there’s no downside to working beyond those 35 years. If your later earnings are higher, they’ll replace the earlier, lower ones in the calculation, potentially increasing your benefit.
2. Focus on Maximizing Your Current Income
The total you contribute through Social Security payroll taxes directly influences your retirement benefits. Anything you can do to improve your current income—like asking for a raise, switching to a better-paying job, or even starting a side hustle—will benefit you down the line. However, if you’re already earning above the taxable wage base, which is set at $176,100 for 2025, increased income won’t affect your retirement benefits. Still, it might enhance your current quality of life.
3. Choose the Right Age to Apply
To receive full benefits based on your work history, it’s essential to apply at your full retirement age (FRA), which is 67 for most people today. If you claim benefits before this age, you could face substantial reductions—up to 30%. This could decrease an average benefit of $2,000 to around $1,400 a month.
On the flip side, if you delay your application past your FRA, your benefits will continue to grow until you turn 70, potentially increasing your monthly check by 24% if you wait. When deciding the best age to apply, consider both your financial situation and your health. If your finances don’t allow you to wait, it may make sense to apply earlier, although it’s wise to avoid any unnecessary debt in the process. Conversely, if you’re in poor health, claiming benefits early might be the right call to ensure you receive something before it’s too late. If you’re married, you’ll also need to consider how your decision affects survivor benefits for your spouse.
When navigating these decisions as a couple, it’s generally beneficial to create a strategy to maximize your combined benefits. For instance, if one partner has a significantly higher income, the lower earner might opt for early retirement benefits while deferring the higher earner’s benefits to increase the payments received later. This thoughtful planning can bolster your overall financial security.
Implementing these strategies isn’t a guarantee that you’ll exceed the average check of $2,000, but they do increase your chances of securing a better financial future in retirement.
