How to Qualify for the Maximum Social Security Benefit

The amount you earned while working and when you start collecting benefits will affect the amount you receive.

My wife and I are about to retire. We’re both 66. Is there a combined maximum that the Social Security system will pay to a household? If not, how do each of us qualify for the maximum amount?

SPECIAL REPORT: Maximizing Social Security Benefits

Your Social Security benefits are calculated based on your highest 35 years of earnings or half of your spouse’s benefits -- whichever is higher -- if you retire at full retirement age (currently 66). For a worker retiring at age 66 in 2012, the maximum benefit is currently $2,513 per month. If both you and your spouse earned the maximum amount that counts every year ($110,100 in 2012, but just $16,500 in 1977), you could each receive the maximum monthly benefits. See the Maximum Taxable Earnings table for each year’s limits.

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Taking benefits earlier or later can affect the payout amounts. Anyone can take benefits as early as age 62, but the monthly payouts will be reduced by as much as 25% for the rest of your life. Or you can delay taking benefits beyond your full retirement age, which boosts your annual payout by 8% for each year you delay, until age 70. If you live longer than the average life expectancy, you’ll end up with a lot more money by delaying your benefits (average life expectancy for a 66-year-old man is 84 years and for a woman, 86 years). See the Social Security Administration’s life-expectancy calculator for the numbers based on your current age.

For more information about Social Security and your benefits choices, see the Social Security retirement planner and the When To Start Receiving Retirement Benefits fact sheet. And for more information about accessing your benefits statement to see what you’re on track to receive, see How to Check Your Social Security Statement Online.

Kimberly Lankford
Contributing Editor, Kiplinger's Personal Finance

As the "Ask Kim" columnist for Kiplinger's Personal Finance, Lankford receives hundreds of personal finance questions from readers every month. She is the author of Rescue Your Financial Life (McGraw-Hill, 2003), The Insurance Maze: How You Can Save Money on Insurance -- and Still Get the Coverage You Need (Kaplan, 2006), Kiplinger's Ask Kim for Money Smart Solutions (Kaplan, 2007) and The Kiplinger/BBB Personal Finance Guide for Military Families. She is frequently featured as a financial expert on television and radio, including NBC's Today Show, CNN, CNBC and National Public Radio.