3 Keys to Earning $ 3,895 in Social Security Benefits Every Month in 2021

If you file for Social Security in 2021, the maximum monthly benefit you could receive is $ 3,895. That’s well above the average benefit most retirees will receive, and it’s $ 105 more than the maximum monthly benefit of $ 3,790 retirees could get in 2020.

Of course, only a very small number of older people will benefit from such a social security benefit. To be one of them, you have to go through three steps.

1. Work at least 35 years

The amount of your social security check is determined by the average salary of your 35 most earning years. If you work less, you will have $ 0 which will reduce the average on which your benefit is based and you will not be able to earn the maximum.

If you’re hoping to earn $ 3,895 per month in benefits in 2021, you’ll need to make sure you’ve worked for at least 35 years to prevent years of $ 0 salary being charged against you.

2. Earn the maximum taxable earnings (or more)

Remember above where I said that Social Security benefits are based on the average salary? This does not necessarily refer to all the wages you earned. Only salaries up to the annual “basic salary limit” are subject to social security tax and only salaries up to this threshold count in determining your benefits.

For 2021, for example, the annual salary limit is $ 142,000, but the limit changes from year to year. The limit creates a de facto cap on the amount of benefits you can receive. If your annual earnings meet or exceed the taxable maximum each year for 35 years, you’ll get the biggest Social Security benefit possible – that coveted monthly check of $ 3,895 in 2021.

3. Claim your benefits at age 70

The Social Security formula that gives you benefits equal to your average salary is used to determine your “primary insurance amount,” which is the benefit you will receive when you retire. If you delay payment of benefits beyond full retirement age, you can increase the amount of your checks by accumulating deferred retirement credits. These are valued at two-thirds of 1% per month, or 8% per year.

If you’re hoping to get the highest possible monthly benefit, you’ll want to wait until your 70th birthday to start receiving your checks. If you apply sooner, you won’t be maximizing your deferred retirement credits, so your Social Security check will be smaller. And if you apply before full retirement age, you’ll be hit with early filing penalties that reduce your check. In 2021, for example, the maximum benefit for someone claiming at age 62 is only $ 2,324.

How can you maximize your own benefits?

For most older Americans who are considering claiming Social Security benefits, it’s too late to change your income history or to go back and earn more each year. But you can check the other two factors on this list – you can make sure you’ve worked for at least 35 years before claiming benefits, and you can wait up to 70 years to claim them. Both of these steps can mean gaining greater benefits, which can provide you with greater financial security in your later years.