It was never meant to be the entirety of anyone's retirement income. But, for some people, Social Security's retirement benefits can be a sizable chunk of change. A handful of retirees are collecting the maximum possible monthly benefit of $4,555 in 2023, which is in line with the Bureau of Labor Statistics' estimated average income for individuals still working in the United States. That maximum amount is set to go up to $4,873 per month next year. If these people have also saved well for retirement on their own -- like contributing regularly to a 401(k) or IRA -- it's conceivable that these folks could be making more money as a retiree than they ever did as an employee.
This prospect raises an important question, though: How does someone secure the maximum monthly Social Security benefit of $4,873 for 2024?
There are three key components to maximizing your eventual Social Security retirement benefits. Chief among these three is the amount of money you make every year while you're working. You have to earn quite a bit, and you have to do so for a long, long while.
$168,600
That's 2024's minimum taxable income you must earn to eventually qualify for the maximum Social Security retirement benefit of $4,873 per month... $168,600.
This hasn't always been the number. It's adjusted every year to account for inflation. In 2023, the minimum amount of taxable income needed to eventually secure the biggest possible Social Security checks was $160,200. In 2022, it was $147,000. The year before that, it was $142,800. For perspective, all the way back in 1993, the minimum earnings threshold that would lead to monthly payments of $4,873 in 2024 was only $57,600. That's not a massive amount of money now, but it was a pretty good chunk of change then.
The table below lays out the minimum amount of money you would have needed to earn every year for the past 40 years to secure the maximum Social Security retirement checks today or whenever you decide to claim benefits in the future.
| Year | Taxable Wages | Year | Taxable Wages |
|---|---|---|---|
| 1985 | $39,600 | 2005 | $90,000 |
| 1986 | $42,000 | 2006 | $94,200 |
| 1987 | $43,800 | 2007 | $97,500 |
| 1988 | $45,000 | 2008 | $102,000 |
| 1989 | $48,000 | 2009 | $106,800 |
| 1990 | $51,300 | 2010 | $106,800 |
| 1991 | $53,400 | 2011 | $106,800 |
| 1992 | $55,500 | 2012 | $110,100 |
| 1993 | $57,600 | 2013 | $113,700 |
| 1994 | $60,600 | 2014 | $117,000 |
| 1995 | $61,200 | 2015 | $118,500 |
| 1996 | $62,700 | 2016 | $118,500 |
| 1997 | $65,400 | 2017 | $127,200 |
| 1998 | $68,400 | 2018 | $128,400 |
| 1999 | $72,600 | 2019 | $132,900 |
| 2000 | $76,200 | 2020 | $137,700 |
| 2001 | $80,400 | 2021 | $142,800 |
| 2002 | $84,900 | 2022 | $147,000 |
| 2003 | $87,000 | 2023 | $160,200 |
| 2004 | $87,900 | 2024 | $168,600 |
Source: Social Security Administration
Oh, and for the record, once your annual income reaches these minimum thresholds, Social Security stops taxing you for any amounts above and beyond these marks. After all, you don't get any additional retirement benefits for earnings in excess of these amounts. (Ordinary income tax rates, of course, continue to grow the more money you make.)
The other two requirements for collecting $4,873 per month
There's an important context missing from the above discussion of minimum taxable earnings levels. That's the length of time you'll need to earn at least the minimum amount of income cited for each respective year. That number is 35 years; you'll need to at least meet or exceed each year's threshold for at least 35 years.
This is a good news/bad news situation.
The good news is that you can work as many years as you want to in order to earn the minimum amount needed each year. The Social Security Administration only considers your highest-earning 35 years (adjusted for inflation) when it's calculating your monthly retirement benefit. If you work for 40 years but fall short of the minimum taxable earnings in five of them, that's OK. You still have the 35 high-earning years you need to collect $4,873 per month in retirement benefits now.
Image source: Getty Images.
The bad news is, of course, our total number of working years is still limited by reality. There comes a time when we just can't work any longer. It's very possible we simply won't reach these annual earnings thresholds a total of 35 times.
What's the other key to collecting monthly retirement checks of $4,873? You can't start collecting until you turn 70 years old. Even if you earn more than is taxed by Social Security for a total of 35 years, retiring at 67 dials 2024's monthly maximum benefit back to $3,911. If you want to retire at the earliest possible age of 62, the monthly payment falls all the way back to $2,710, even if you are a high earner for the required 35 years.
You don't need the maximum Social Security benefit
Don't sweat it if you'll never collect the maximum Social Security retirement payment. Most people don't. You can still do just fine in retirement by consistently saving and investing your money. In fact, it's possible to collect dividend and interest income in excess of $4,873 per month in retirement if you can build enough of a nest egg. The key is just getting started as early in life as possible and tucking away as much as you possibly can, even when it's a bit of a budgetary stretch to do so.
To this end, it wouldn't hurt to set a specific long-term savings goal with milestone targets to aim for in the meantime. You can then work backward to figure out exactly how much you need to save along the way and how much that money needs to earn once saved. Making such a plan requires doing a little bit of math, although there are several tools available on the web that make this work much easier.
Our guide to retirement planning is a great place to start if you need help creating such a plan. If not there, at least start somewhere. That's often the toughest part.
