When it comes to retirement, it's always better to be financially overprepared than underprepared, which generally involves using all available resources. For many people, Social Security is a main source of retirement income. It can provide retirees with consistent income to help cover living expenses and is crucial to millions of Americans' retirement finances.
The amount of retirees' monthly Social Security benefits varies, but there is a maximum amount that beneficiaries can earn. For 2024, the maximum Social Security retirement benefit is $4,873 per month. If you're eyeing the maximum benefit, there are two things you need to do to make it happen.
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1. Earn over the wage base limit
Social Security calculates your monthly benefit using your average earnings during the 35 years when your income was the highest. It adjusts your earnings for inflation and then divides the total number of months in those 35 years to get your average indexed monthly earnings (AIME).
However, Social Security doesn't consider all earnings. Only earnings up to a certain amount (called the wage base limit) are taxed annually and used by Social Security to calculate your monthly benefit. To receive the maximum $4,873 monthly retirement benefit, your earnings must have been at or above the wage base limit for all of the 35 years that Social Security uses to calculate your benefit.
For 2024, the wage base limit is $168,600, but each year it's adjusted for inflation. Here are the wage base limits from the previous five years:
| Year | Wage Base Limit |
|---|---|
| 2023 | $160,200 |
| 2022 | $147,000 |
| 2021 | $142,800 |
| 2020 | $137,700 |
| 2019 | $132,900 |
Data source: Social Security Administration.
2. Delay claiming benefits until you turn 70
The second, equally important step to receiving the maximum $4,873 monthly Social Security benefit is delaying claiming benefits until you reach 70.
Your full retirement age plays a key role in determining your monthly benefit. Claiming benefits at your full retirement age (which is based on your birth year) will give you your primary insurance amount, which serves as your baseline benefit. However, you don't have to claim benefits then. You can claim benefits before your full retirement age, which reduces your benefits, or after, which increases them.
Delaying benefits past your full retirement age increases them by two-thirds of 1% each month until you turn 70. This works out to around 8% annually and 24% total if your full retirement age is 67 (which is the case for most people). You can technically delay benefits past 70, but they don't increase further, so there's no need.
To receive the maximum Social Security benefit, you must meet the earnings requirement as well as delay claiming benefits until you reach age 70. Doing one without the other would automatically make you ineligible to receive the maximum amount.
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Most people should prepare not to receive the maximum benefit
As enticing as receiving $4,873 monthly for Social Security sounds, it's important to note that most people won't be eligible for it.
Earning over the wage base limit in one year is hard; doing it for 35 years isn't feasible for the overwhelming majority of Americans. According to the U.S. Census Bureau, the median U.S. household income in 2022 was $74,580, and Social Security says only roughly 6% of people earn above the wage base limit annually.
To get an idea of your monthly benefit, you can check out your earnings record on the Social Security Administration website (SSA.gov). Your earnings record will show the income history that Social Security has on file and an estimate of your monthly benefit based on when you claim.
Whether you're eligible for the full benefit or not, Social Security would ideally be a portion of your retirement income instead of all of it. This may not be an option for everyone, but being proactive with your retirement savings can help ensure a more comfortable and financially secure retirement.
