Social Security's wealthiest beneficiaries take in $4,873 per month from the program in 2024. That's more than $58,000 annually. Some households may even get more if they have more than one person claiming benefits.
That's already a pretty large sum, but it's about to get even bigger. Starting in 2025, Social Security benefits are going up for everyone, including those at the top.
Image source: Getty Images.
Next year, the government will pay out the largest benefits in the history of the program. But only a select few will be lucky enough to claim them.
How the Social Security Administration calculates your checks
The Social Security Administration updates its maximum benefit annually to accommodate the shifting Social Security benefit formula. This formula always begins with the government calculating your average indexed monthly earnings (AIME). This is your average monthly earnings over your 35 highest-earning years, adjusted for inflation. If you've worked fewer than 35 years, it'll add zero-income years to your calculation.
To be clear, AIME doesn't always consider all your earnings in a given year, though it does for most people. High earners may find this isn't the case for them, since there's a ceiling on income subject to Social Security payroll taxes. In 2024, that's $168,600, but it was lower in previous years. Earning more than this limit won't increase your Social Security benefit.
Average AIME typically rises over time because average earnings increase over time. That's one reason the maximum Social Security benefit keeps going up.
The next step in the benefit formula is to determine your primary insurance amount (PIA). Here's what the 2024 formula looks like:
- Multiply the first $1,174 of your AIME by 90%.
- Multiply any amount over $1,174 up to $7,078 of your AIME by 32%.
- Multiply any amount over $7,078 by 15%.
- Add up your results from Steps 1 through 3 and round down to the nearest $0.10.
This formula stays pretty consistent. The only things that change over time are the bend points -- $1,174 and $7,078 in our example above. The government updates the bend points each year, which also results in higher average benefits over time. However, it always uses the bend points in place in the year you turned 60 to determine your benefit, no matter when you apply.
For most people, there's one more step in the Social Security benefit calculation. The government adjusts your PIA up or down based on your age at application and your full retirement age (FRA). Your FRA should be between 66 and 67, depending on your birth year.
Claiming early reduces your benefit, while delaying Social Security past your FRA increases your checks. The longer you wait, the faster your checks grow, as shown in the table below:
|
Checks Grow by: |
Full Retirement Age (FRA) of 66 |
Full Retirement Age (FRA) of 67 |
|---|---|---|
|
5/12 of 1% per month (5% per year) |
From 62 to 63 |
From 62 to 64 |
|
5/9 of 1% per month (6.67% per year) |
From 63 to 66 |
From 64 to 67 |
|
2/3 of 1% per month (8% per year) |
From 66 to 70 |
From 67 to 70 |
Data source: Social Security Administration.
The result is your monthly Social Security check. This same process also helps us determine the maximum Social Security benefit for the year.
The 2025 maximum Social Security benefit and who gets it
The formula above highlights the three things a person must do to claim the 2025 maximum Social Security benefit:
- Work for at least 35 years before applying for benefits, to avoid zero-income years in your benefit calculation.
- Earn the maximum income subject to Social Security payroll taxes in each of those 35 years.
- Apply for benefits at age 70 or later.
Most people won't pull this off, simply because they didn't have a high enough income during their working years. But those who are able to do so will take home a record $5,108 per month in 2025. That will earn them $61,296 in benefits next year.
This is well above the $1,920 average benefit that retirees got in August 2024, an amount which is expected to rise to $1,968 after the Social Security Administration applies the 2.5% cost-of-living adjustment (COLA) to beneficiaries' checks.
Your 2025 benefit likely won't be the largest or the average, so you must estimate it for yourself. You can do this by adding 2.5% to your existing checks to get a decent approximation. Otherwise, you can wait for the Social Security Administration to send you a personalized COLA notice in December. You can also access this notice in the Message Center of your my Social Security account, if you have one, beginning in early December.
