How much you receive in Social Security benefits depends heavily on you. The decisions you make before you retire have significant repercussions later.
It's possible to collect up to $4,555 per month in Social Security benefits. But there are three steps you must take to claim this maximum amount.
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1. Work for at least 35 years
Let's start with what's probably the easiest prerequisite to collecting the maximum monthly Social Security benefit. You must first work for at least 35 years.
This step shouldn't be difficult for most Americans. If you begin your career by age 25 and then work at least until you're 60, you're all set.
What if you work for more than 35 years? It won't change the maximum benefit, but it could help you reach it. Social Security benefits are calculated using average indexed monthly earnings (AIME) for the 35 working years with the highest indexed earnings.
2. Earn the maximum taxable amount each year
The next step is much more difficult. You'll need to earn the maximum taxable amount (also called the contribution and benefit base) in each of the 35 years used to calculate Social Security benefits.
This maximum taxable amount stands at $160,200 for 2023. However, it changes nearly every year. The following table shows what the threshold has been over the last five decades:
| Year | Earnings | Year | Earnings |
|---|---|---|---|
| 1973 | $10,800 | 1999 | $72,600 |
| 1974 | $13,200 | 2000 | $76,200 |
| 1975 | $14,100 | 2001 | $80,400 |
| 1976 | $15,300 | 2002 | $84,900 |
| 1977 | $16,500 | 2003 | $87,000 |
| 1978 | $17,700 | 2004 | $87,900 |
| 1979 | $22,900 | 2005 | $90,000 |
| 1980 | $25,900 | 2006 | $94,200 |
| 1981 | $29,700 | 2007 | $97,500 |
| 1982 | $32,400 | 2008 | $102,000 |
| 1983 | $35,700 | 2009 | $106,800 |
| 1984 | $37,800 | 2010 | $106,800 |
| 1985 | $39,600 | 2011 | $106,800 |
| 1986 | $42,000 | 2012 | $110,100 |
| 1987 | $43,800 | 2013 | $113,700 |
| 1988 | $45,000 | 2014 | $117,000 |
| 1989 | $48,000 | 2015 | $118,500 |
| 1990 | $51,300 | 2016 | $118,500 |
| 1991 | $53,400 | 2017 | $127,200 |
| 1992 | $55,500 | 2018 | $128,400 |
| 1993 | $57,600 | 2019 | $132,900 |
| 1994 | $60,600 | 2020 | $137,700 |
| 1995 | $61,200 | 2021 | $142,800 |
| 1996 | $62,700 | 2022 | $147,000 |
| 1997 | $65,400 | 2023 | $160,200 |
| 1998 | $68,400 |
Data source: Social Security Administration.
There's one other wrinkle to keep in mind. You must reach the maximum taxable amount in a job for which Social Security taxes are applicable. That's the case for most jobs, but not all. For example, some employees of state, county, and municipal governments are covered by state-funded pension plans instead of Social Security. Railroad employees are also covered by a separate pension.
3. Wait until age 70 to collect Social Security benefits
The third step to maximizing your Social Security benefit is to wait until you reach age 70 to begin collecting retirement benefits. This is a good idea for most people even if they don't check off the second step for claiming the $4,555 max monthly Social Security benefit. It can boost the amount you receive by 24% compared to claiming at a full retirement age of 67.
However, most individuals don't hold off until 70 to receive benefits. Last year, only 8.6% of men and 9.5% of women did so, according to the Social Security Administration.
One more thing
The maximum monthly Social Security benefit will almost certainly increase in 2024 and probably in the subsequent years. The annual cost-of-living adjustment (COLA) for Social Security should push the maximum amount higher unless there's no inflation (which seems unlikely).
However, there's also a possibility that the maximum amount could be reduced in the future. The combined Social Security trust funds are on track to run out of money in the next decade unless changes are made. If this happens, Social Security will continue to pay benefits, but at a reduced level. In this case, how much you receive in Social Security benefits depends not on you but on your congressional representatives.
