In October, the Social Security Administration announced a 2.5% cost-of-living adjustment (COLA) for retired workers and other beneficiaries in 2025. That change, coupled with annual modifications to the primary insurance amount formula, mean the maximum Social Security benefit for retired workers will increase next year.

However, a recent survey from Nationwide Retirement Institute suggests very few Americans know how to maximize Social Security. Less than half of surveyed adults were aware that claim age factored into the calculation, and only 4% correctly identified all the pertinent variables that determine the maximum benefit.

That knowledge gap could be problematic for anyone nearing retirement because most seniors depend on Social Security to some degree. In fact, monthly benefits are often the largest source of retirement income. Anyone who doesn’t know how to maximize their Social Security could shortchange themselves and lower their living standard.

Read on to see the maximum Social Security benefit at ages 62, 66, and 70 in 2025. I’ll also discuss what it takes to earn the maximum payout.

Image source: Getty Images.

The maximum Social Security benefit at ages 62, 66, and 70 in 2025

The Social Security program undergoes several important changes each year to keep benefits aligned with inflation and general wage levels. One consequence of those annual changes is the maximum Social Security benefit generally increases. Listed below is the biggest payout retired workers can receive at different claim ages in 2025.

• Age 62: $2,831
• Age 66: $3,795
• Age 70: $5,108

There is an important lesson here: Claim age has a profound impact on benefits. In 2025, retired workers that claim Social Security at age 70 could receive $2,277 more each month than retired workers that start benefits at age 62. Put differently, retirees that claim at age 70 next year could receive an additional $27,324 in annual benefit income compared to retirees that claim at age 62.

What it takes for retired workers to qualify for the maximum Social Security benefit

The Social Security Administration use three variable to determine benefits for retired workers: (1) work history, (2) lifetime earnings, and (3) claim age. Retirees that optimize the first two variables will receive the biggest possible benefit at a given claim age. But retirees that want the absolute maximum payout must claim Social Security at age 70 precisely. Details are provided below:

• Work history: The benefits formula uses income from 35 highest-paid years of work to find the primary insurance amount (PIA) for each retiree. The PIA is the payout a person will receive if they claim Social Security at full retirement age (FRA). Workers that spend less than 35 years in the workforce have zeros factored into the formula, which makes it impossible to qualify for the maximum benefit.
• Lifetime income: The benefits formula only considers income up to the maximum taxable earnings limit. To qualify for the biggest Social Security payout, workers must have income that equals or exceeds that limit for 35 years. The taxable maximum is adjusted annually to account for the general rise in wages. It will be $176,100 in 2025, up from $168,600 in 2024.
• Claim age: Eligibility for retirement benefits begins at age 62. However, workers that start Social Security before FRA receive a reduced benefit, meaning they get less than 100% of their PIA. And workers that delay Social Security beyond FRA receive an increased benefit, meaning they get more than 100% of their PIA.

To elaborate, workers that claim Social Security after FRA earn delayed retirement credits that increase their benefit by two-thirds of a percent per month, or eight percent annually. Delayed retirement credits stop accruing at age 70. So, workers who claim Social Security at 70 will earn the absolute maximum benefit, provided they satisfy the criteria concerning work history and lifetime income.

Importantly, very few Americans make enough money to earn the maximum benefit. Only about 6% of workers reported income above the taxable maximum last year, so the percentage of the population that satisfies that condition for 35 years is even smaller. But the general principles I’ve discussed can help any worker increase their future Social Security benefit.

For instance, anyone that plans to retire after fewer than 35 years of employment should think twice. That decision will automatically reduce their benefit. Likewise, anyone that plans to claim Social Security at age 62 (i.e., as soon as possible) may want to reconsider. That decision results in the most severe benefit reduction.

To elaborate, retired workers born in 1960 or later will get a Social Security benefit equal to 70% of their PIA if they claim at 62, but they will get a benefit equal to 124% of their PIA if they claim at 70. In other words, retirees can increase their benefit 77% by claiming at 70 rather than 62.

The $22,924 Social Security bonus most retirees completely overlook

If you’re like most Americans, you’re a few years (or more) behind on your retirement savings. But a handful of little-known “Social Security secrets” could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $22,924 more… each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we’re all after. Simply click here to discover how to learn more about these strategies.

View the “Social Security secrets” »

The Motley Fool has a disclosure policy.