Most people know that their Social Security income in retirement will be based on how much they earned during their career. All things being equal, the more you earn, the bigger your monthly retirement checks will be. There is, however, a maximum amount anyone can receive each month from Social Security.
Reaching that maximum possible benefit requires a combination of a long, high-paying career, patience, persistence, and good timing. Only a handful of people will qualify each year. If you want to join them, you’ll need to plan years in advance, and put yourself on the right trajectory.
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It all starts with earning a high salary, though.
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The foundations for determining your Social Security benefit
If you want to understand how to maximize your Social Security benefits, you need to understand the three factors that influence the size of your monthly checks.
- How much you earn during each year of your career;
- When you were born;
- When you start collecting benefits.
When you apply for your benefits, the Social Security Administration (SSA) will take a look at your entire earnings history. Earnings from each year before you turn 60 will be multiplied by an index factor that adjusts those figures for inflation, making them comparable with the wages earned in the year you turned 60. Earnings in years after that don’t receive an inflation adjustment before going into your benefits calculation.
The SSA then selects the 35 years during which you had your highest adjusted earnings and takes the average of them. That number is used to calculate your primary insurance amount (PIA) based on the Social Security benefits formula.
Your PIA is the amount you’ll receive each month if you apply for benefits when you reach your full retirement age — a point determined by when you were born. Those born between 1943 and 1954 reached full retirement age at 66. Those born later will have to wait an extra 2 months for each year they were born after 1954 until the full retirement age maxes out at 67 years old for anyone born in 1960 or later.
If you claim benefits before reaching your full retirement age, you’ll receive less than your PIA each month. Conversely, if you wait to claim, you’ll receive more. Specifically. you’ll get a boost of 2/3 of a percentage point in your checks for each month beyond your full retirement age that you postpone taking them — up until you reach 70, at which point those delayed retirement credits max out. That means someone born in 1955 could boost their monthly benefit by 30.7% if they waited until their 70th birthday to claim Social Security.
The salary you need if you want the maximum possible benefit
While the SSA will take a look at your entire earnings history when it comes to calculating your monthly benefit, it likely won’t include every single dollar you earned during your career — and if you’re in line for a high benefit, it likely won’t be based on all of your earnings from those 35 most lucrative years. That’s because there are limits to how much of your annual wages are subject to Social Security taxes. If your earnings in any given year exceed that cap, you don’t pay wages taxes on the excess.
But wages you don’t pay Social Security tax on don’t count when calculating your earnings history.
That cap rises every year to account for wage inflation. To maximize your Social Security benefit in retirement, you’ll need at least 35 years with earnings at or above that year’s maximum taxable level. Here are the last 50 years of those caps.
| Year | Earnings | Year | Earnings |
|---|---|---|---|
| 1976 | $15,300 | 2001 | $80,400 |
| 1977 | $16,500 | 2002 | $84,900 |
| 1978 | $17,700 | 2003 | $87,000 |
| 1979 | $22,900 | 2004 | $87,900 |
| 1980 | $25,900 | 2005 | $90,000 |
| 1981 | $29,700 | 2006 | $94,200 |
| 1982 | $32,400 | 2007 | $97,500 |
| 1983 | $35,700 | 2008 | $102,000 |
| 1984 | $37,800 | 2009 | $106,800 |
| 1985 | $39,600 | 2010 | $106,800 |
| 1986 | $42,000 | 2011 | $106,800 |
| 1987 | $43,800 | 2012 | $110,100 |
| 1988 | $45,000 | 2013 | $113,700 |
| 1989 | $48,000 | 2014 | $117,000 |
| 1990 | $51,300 | 2015 | $118,500 |
| 1991 | $53,400 | 2016 | $118,500 |
| 1992 | $55,500 | 2017 | $127,200 |
| 1993 | $57,600 | 2018 | $128,400 |
| 1994 | $60,600 | 2019 | $132,900 |
| 1995 | $61,200 | 2020 | $137,700 |
| 1996 | $62,700 | 2021 | $142,800 |
| 1997 | $65,400 | 2022 | $147,000 |
| 1998 | $68,400 | 2023 | $160,200 |
| 1999 | $72,600 | 2024 | $168,600 |
| 2000 | $76,200 | 2025 | $176,100 |
Data source: Social Security Administration.
As you can see, the income requirements to reach the highest possible Social Security payment are quite steep. The median full-time U.S. worker now earns about $62,000 a year, according to data from the Bureau of Labor Statistics. So you’ll need a salary nearly three times higher than average if you want to max out your monthly Social Security benefits. But that’s not the only requirement.
It takes more than a high salary
There are a few important details that those chasing the maximum possible monthly benefit can’t ignore.
First, you’ll need to wait to start taking benefits until you turn 70. There’s no way around this. Everyone’s personal benefit maxes out at 70.
Moreover, the maximum possible benefit is really only available to those reaching 70 this year. Due to slight adjustments each year in the Social Security bend points, the benefits formula typically favors younger workers. So, balancing the requirement of waiting until 70 with the formula’s favorability toward those who are younger means only those born in 1955 can actually qualify for the $5,108 max benefit in 2025. It will almost always be the case that those qualifying for the year’s maximum possible benefit will turn 70 that year, so this year’s max beneficiaries won’t be next year’s.
The last detail if you want the maximum possible benefit is that you have to continue working each year through the prior year. That’s because the inflation adjustments for your previous earnings stop at age 60. As a result, the maximum taxable earnings in years beyond age 60 are almost always higher than the inflation-adjusted earnings from earlier in your career.
With all of those requirements, only a small handful of people will receive the maximum $5,108 monthly benefit this year.
Even if you won’t be eligible for whatever the maximum possible benefit is when you retire, it’s important to understand how the SSA calculates the size of your benefit and what you can do to increase it. While those who are collecting more than $5,000 per month from this government benefit program probably don’t rely heavily on that income, most seniors rely at least partially on their Social Security income in retirement. As such, making the most of your benefits is essential to enjoying your golden years.
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