Having a financial plan in place in the years (preferably decades) leading up to retirement can go a long way toward ensuring that finances aren't your top problem at a time that's meant to be stress-free. For millions of Americans, Social Security is an important part of their financial plan in retirement, accounting for a large portion of their retirement income.
Regardless of what role Social Security plays in your retirement income, it's common for people to wonder if they can achieve the maximum amount possible. For 2024, the maximum Social Security benefit is $4,739. Although receiving the maximum benefit isn't easy, it's not impossible either. Here's how to do it.
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How Social Security calculates your monthly benefits
Social Security calculates your monthly benefit using your average income during the 35 years when your income was the highest. However, not all income is considered. Only income up to the wage base limit is taxed each year and used by Social Security to calculate your benefit.
The wage base limit is the maximum amount of your income that Social Security taxes each year, adjusted for inflation. For 2024, the wage base limit will be $168,600, up from 2023's $160,200 limit. That means any income earned over $168,600 will not face the 12.4% Social Security tax (6.2% from both you and your employer unless you're self-employed).
To receive the maximum $4,739 monthly Social Security benefit, your income in the 35 years Social Security uses in its calculations must be equal to or greater than the wage base limit for those years. For example, if the past five years will be used in your calculations, here's the minimum your income must have been:
| Year | Wage Base Limit |
|---|---|
| 2023 | $160,200 |
| 2022 | $147,000 |
| 2021 | $142,800 |
| 2020 | $137,700 |
| 2019 | $132,900 |
Data source: Social Security Administration.
Since the wage base limit is adjusted for inflation annually, you must earn the inflation-adjusted equivalent of $168,600 for at least 35 years to qualify for the maximum benefit.
Earnings are only one piece of the equation
Your earnings are important in deciding your monthly benefit, but they're only half of the equation. The other half is when you claim benefits.
Your full retirement age, which is based on your birth year, plays a large role in determining your Social Security benefit because it's the age when you're eligible to receive your full monthly benefit. Social Security uses this age to determine if you're claiming early or late.
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The maximum monthly benefit for claiming at your full retirement age in 2024 is $3,822. If your full retirement age is 67 and you claim benefits at 62, they'll be reduced by 30% to $2,675 monthly. The opposite is also true. Delaying benefits will increase them by two-thirds of 1% each month until you reach age 70.
To receive the maximum Social Security benefit, you must meet the income requirement as well as delay claiming benefits until you reach age 70. You can't do one or the other; it must be both.
How to check your estimated benefit
Thankfully, you don't have to wait until retirement to get an idea of how much your Social Security benefit will be. You can check your earnings record at any time to get an estimate based on when you decide to claim (early, at full retirement age, or late).
To check your earnings record, you must first create an account on the Social Security website (SSA.gov). Once that's done, you should be able to see your annual earnings record and projected benefits.
For most people, the projected benefit will be noticeably below the maximum possible. This is understandable when you consider that according to the Social Security Administration, only roughly 6% of people earn above the wage base limit each year, with far fewer doing it for 35 years throughout a career.
Whether you're eligible for the full benefit or not, your goal should be to have Social Security as one retirement income source, not your sole source. Taking advantage of retirement accounts like 401(k)s and IRAs can help lessen your financial burden in retirement, allowing you to focus on what's important: enjoying your retirement however you see fit.
