With millions of retirees relying on Social Security benefits, they all want to make their monthly Social Security payments as high as possible. There are several things you can do to maximize your Social Security benefits, but there is a maximum benefit. Unfortunately, very few Social Security beneficiaries qualify for the maximum payment each month.
If you want to learn more about the maximum Social Security benefit, then keep reading! We will tell you exactly what the maximum amount is in 2024 as well as how you can get the maximum amount each month. Let’s dive into the details.
The Maximum Social Security Benefit Amount
So, what is the maximum Social Security benefit? The maximum Social Security benefit amount in 2024 is $4,873.
This number is published by the Social Security Administration and is the highest retirement benefit that you can earn each month. The maximum Social Security amount can only be achieved by those who accrue delayed retirement credits by waiting until age 70 to start their benefits.
The maximum amount that someone can receive starting at full retirement age is $3,822, and the maximum amount for someone starting their benefits early (at age 62) is $2,710.
In addition to your retirement age, other factors will also affect whether or not you earn the maximum. The number of years that you work and pay Social Security taxes will affect your payment amount as well as how much money you make while you are working.
While the maximum amounts discussed above are possible, the average American receiving Social Security retirement benefits gets far less than this. The average Social Security payment for a retired worker in 2023 was $1,905. Since most beneficiaries are receiving far less than the maximum amount, most people need some tips on how to qualify for the maximum benefit amount.
How Social Security Benefits Are Calculated
When planning your retirement income, it is critical to have a basic understanding of how your monthly benefit from Social Security will be calculated. So, how much does Social Security pay? The formula is somewhat complex, but here is how the Social Security Administration (SSA) calculates your monthly payments. First, you will need access to your lifetime earnings history. You may obtain a copy of your earnings history through your Social Security account at SSA.gov.
- Using your earnings history, you will need to calculate your average indexed monthly earnings (AIME). Here is how to do that. Use the indexing factors from the Social Security Administration to index each year’s earnings to current values. These indexing factors are based on the national average wage index and adjust your annual salary for inflation. For instance, if you earned $60,000 in 2010, the index factor might adjust that to $70,000 for 2024.
- Once you have indexed each year’s earnings to current values, you will average the 35 highest values. If you do not have income for at least 35 years, then you will need to use a zero for some years to arrive at a total of 35 years. For instance, if you only worked for 30 years, you would use five zeros in your calculation. Once you have your average yearly earnings, you will divide that number by 12 to arrive at your AIME.
- After you calculate your AIME, you must apply the Social Security bend points to get your primary insurance amount. Your primary insurance amount will be the sum of the following: 90% of your AIME up to $1,174 plus 32% of your AIME between $1,174 and $7,078 plus 15% of your AIME above $7,1078. This sum equals your primary insurance amount. You will then adjust your primary insurance amount based on your retirement age to arrive at your monthly benefit amount.
This calculation is quite complex, and it is difficult for most people to perform this on their own. Thankfully, there is an easier way! When you start your retirement planning, you can simply log into your My Social Security account and use the SSA benefit calculator tool. This tool will estimate your benefits for you without the need to perform all these complex calculations. Remember that your spouse might also be entitled to up to 50% of your primary insurance amount in spousal benefits — even if they don’t have their own earnings record!
How To Get The Maximum Social Security Retirement Benefit
Now that you know how your Social Security payout is calculated, what can you do to receive the maximum amount once you claim Social Security benefits? There are a couple of things that you absolutely must do if you want to receive the highest amount possible from Social Security. Here is what you have to do.
— Earn The Social Security Maximum For 35 Years
Remember that your monthly checks from Social Security are based primarily on how much you earned during your working years. If you are a high earner, your payments will be higher during retirement. Since you only pay Social Security taxes on your earnings up to the Social Security tax limit, you will need to max out your earnings to this limit for 35 years. If you are self-employed, make sure you pay your income taxes correctly on your taxable income to get proper credit for your earnings. In 2024, the Social Security tax limit is $168,600. Earning that maximum amount each year for 35 years will ensure that your primary insurance amount is as high as possible when the calculation of your benefits is performed.
— Start Benefits At 70 — Not At Full Retirement Age
You can start your retirement benefits as early as age 62, but doing so will reduce your monthly benefits by around 30%. Waiting past full retirement age (FRA) can allow you to accrue delayed retirement credits, thus increasing your monthly payment. Your delayed retirement credits will max out at age 70. So, starting your benefits at 70 will result in the highest possible benefit amount. If you want to get the maximum amount possible from Social Security, you will need to wait until age 70 to start your benefits.
Estimating Your Own Social Security Payment Amounts
When you are planning for retirement, it is crucial that you know how much your own Social Security check will be. Knowing the maximum amount available and the average amount that a retiree receives is nice, but you must know how much you will receive each month to plan properly for your retirement. Here is how you can do that.
- First, you can manually perform the calculation that was described earlier in this article. You can take a look at your lifetime earnings history, calculate your AIME, apply the Social Security bend points, and adjust the primary insurance amount based on your retirement age. Those steps will allow you to calculate how much you will receive from Social Security. However, there is a much easier way!
- The easiest way to estimate your own payment amounts is through the benefits estimator tool at SSA.gov. You can create a My Social Security account online. Once you log into your account, you will have access to the benefits estimator. This tool will automatically use your earnings history and the retirement date that you provide to calculate your benefits. The tool will provide an accurate estimate of how much your Social Security check will be each month. You can also use the tool to easily see how your retirement date will affect your payment amount.
If you are unsure how to properly plan for retirement even after getting your estimate, you should likely consult a financial advisor.
Most people find that payments from Social Security alone are not enough. You will likely need to plan for additional retirement savings through an IRA, 401k, annuity, or other retirement accounts. This will allow you to combine withdrawals from your retirement account with your Social Security check for a higher standard of living during your retirement years.
How Cost-Of-Living Adjustments Can Raise The Maximum Benefit
Although the maximum amount you can receive in Social Security benefits in 2024 is $4,873 that amount could change next year. The Social Security Administration looks at the Consumer Price Index for Urban Wage Earners and Clerical Workers each year. They assess the rise in the CPI-W as a method for adjusting benefit payments to account for inflation. When prices rise, benefit payments also rise. These yearly adjustments are known as cost-of-living adjustments or COLA. Thankfully, benefit payments are never decreased, even if the CPI-W shows a negative rate of inflation.
As benefit payments are adjusted for inflation, this also adjusts the maximum amount that you can receive from Social Security. Consider this example. Suppose the CPI-W at the end of 2024 shows a 3% rise in the cost of goods. The COLA for 2025 would then be 3%. Applying the COLA to the current Social Security maximum would result in a new maximum of $5,019. So, if the 2025 COLA is 3%, the new Social Security maximum benefit amount in 2025 would be $5,019. As you can see, the Social Security maximum is likely to rise slightly each year as the cost-of-living adjustments are applied.
Maximum Supplemental Security Income (SSI) Benefit
Individuals who are 65 or older but have no work history might still be able to get some help from Social Security through SSI benefits. However, a financial need is required to qualify for SSI benefits. Similarly, younger individuals who are disabled and unable to work can also qualify for SSI benefits if a financial need is present. This means that you must have limited income and resources to qualify.
In 2024, the maximum SSI benefit payment each month is $943 for an eligible individual. The maximum payment is $1,415 for an individual with an eligible spouse. Although these are the maximum payment amounts, many people receive less than this. These payment amounts can be adjusted based on a person’s income and other factors. On average, an SSI recipient gets about $670 per month.
Participation in SSI also automatically qualifies you for several other government assistance programs. For instance, you might automatically be eligible for Medicaid, food stamps, housing assistance, and other programs. As you can see, SSI payment amounts are significantly lower than Social Security retirement payments. However, most SSI recipients have not paid Social Security taxes into the system long enough to qualify for Social Security retirement benefits.
The Bottom Line
Before you start to take Social Security benefits, you should check to see if you have done everything you can to get the maximum benefit. So, what is the maximum Social Security payment? In 2024, the highest Social Security payment possible is $4,873. Achieving this payment will require that you earn at least the Social Security tax limit for 35 years, and it will also require that you wait until age 70 to start your benefits. The maximum amount is likely to be increased in some years going forward as Social Security benefits are adjusted for cost-of-living increases (COLA).
Frequently Asked Questions
How much do you have to make to get maximum Social Security?
In 2024, you need to make $168,600 to hit the Social Security tax limit for the year. To get the maximum Social Security benefit, you will need to earn at least the amount of the tax limit for 35 years. The tax limit usually increases each year as Social Security benefits are adjusted for inflation. In the future, the tax limit might be increased further to provide more funding for the Social Security program.
What are the requirements to get maximum Social Security?
First, you must max out your earnings. This means that you must earn at least the Social Security tax limit for at least 35 years. Remember that Social Security uses your highest 35 years of earnings when calculating your retirement benefit. If you have worked fewer than 35 years, you will have some zeros in your calculation. Next, you must accrue delayed retirement credits to increase your monthly payment. You should max out those credits by waiting until age 70 to start benefits. So, if you max out your earnings for 35 years and wait until age 70 to start your benefits, you will get the maximum amount from Social Security.
How does the Social Security benefit work?
Here is how Social Security works. During your working years, you pay Social Security taxes on your earnings. These taxes are placed into the Social Security trust funds and used to pay benefits to current beneficiaries. When you retire, your benefits will be paid by the taxes collected from current workers. Your benefit amount is directly related to how much money you paid into the system and the age at which you started receiving your benefits. Since benefits are paid for life, they work similarly to an annuity. The earlier you start your payments, the lower the monthly amount will be. Similarly, waiting until later in life to begin your benefits will result in a higher monthly amount. Even after you die, your surviving spouse might be entitled to survivor benefits. These benefits can be as much as 100% of the deceased spouse’s benefit amount.
How many people get the maximum Social Security benefit?
Not many people get the maximum Social Security benefit. In fact, the average benefit paid to retired workers is about $1,905 per month. Almost 60% of retired workers receive less than $2,000 per month from Social Security. While there are a few individuals who receive the maximum Social Security benefit, the chances of getting that much are not very high.
