The average Social Security benefit isn't going to cover most of the average retiree's living expenses. At just $2,000 per month, it's likely just enough to cover the very basic of basics these days. So, if you're hoping Social Security will cover most of your living expenses after you stop working, you need to ensure you're earning a high salary today.
If you successfully maxed out Social Security throughout your career, you could retire this year with a monthly benefit of $5,108. And that number typically climbs higher year after year thanks to Social Security's annual COLA.
But if you want the maximum possible benefit, you need to earn a very high salary throughout your career. Even then, only a handful of retirees will qualify for the maximum possible benefit each year. Here's what you need to know.
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How the government calculates your Social Security benefit
You probably know that your salary plays a big role in determining the size of your monthly benefit, but it's important to know the entire process for how the Social Security Administration (SSA) calculates how much to send you.
When you apply for Social Security, the SSA will look at your entire earnings history. Of course, a dollar earned 40 years ago isn't worth the same as a dollar today, so it adjusts those earnings for increases in the standard of living. Importantly, the SSA doesn't make any adjustments to earnings after you turn 60.
After adjusting your wages for inflation, it takes the 35 highest-earning years of your career and calculates your monthly average earnings. That number gets plugged into the Social Security benefits formula, which spits out your primary insurance amount, or PIA.
Your PIA is the amount you'd receive if you apply for benefits when you reach your full retirement age. That age is determined by when you were born. Anyone born between 1943 and 1954 reached full retirement age at 66 years old. However, the age increases by two months for each year you were born after 1954 until maxing out at age 67 for anyone born in 1960 or later.
The final factor in determining your monthly benefit is when you apply. If you apply before your full retirement age, you'll receive less than your PIA. If you wait to claim until after, you'll receive more. You benefits max out when you reach 70.
Here's the salary you need if you want the max benefit
If you want the maximum possible benefit, there's another detail to consider. For high-income individuals, not everything you earn will count toward your earnings record for Social Security. That's because the SSA puts a cap on the amount of wages you have to pay Social Security taxes on. If you don't pay any taxes on the wages, they don't count for calculating your retirement benefit.
The cap is called the contribution and benefit base. The SSA adjusts the number each year for changes in the standard of living. The contribution and benefit base in 2025 is $176,100.
But since the SSA uses 35 years of earnings history to calculate your benefit, you'll have to earn above the contribution and benefit base for at least that long. So, here's the last 50 years for reference.
| Year | Earnings | Year | Earnings |
|---|---|---|---|
| 1976 | $15,300 | 2001 | $80,400 |
| 1977 | $16,500 | 2002 | $84,900 |
| 1978 | $17,700 | 2003 | $87,000 |
| 1979 | $22,900 | 2004 | $87,900 |
| 1980 | $25,900 | 2005 | $90,000 |
| 1981 | $29,700 | 2006 | $94,200 |
| 1982 | $32,400 | 2007 | $97,500 |
| 1983 | $35,700 | 2008 | $102,000 |
| 1984 | $37,800 | 2009 | $106,800 |
| 1985 | $39,600 | 2010 | $106,800 |
| 1986 | $42,000 | 2011 | $106,800 |
| 1987 | $43,800 | 2012 | $110,100 |
| 1988 | $45,000 | 2013 | $113,700 |
| 1989 | $48,000 | 2014 | $117,000 |
| 1990 | $51,300 | 2015 | $118,500 |
| 1991 | $53,400 | 2016 | $118,500 |
| 1992 | $55,500 | 2017 | $127,200 |
| 1993 | $57,600 | 2018 | $128,400 |
| 1994 | $60,600 | 2019 | $132,900 |
| 1995 | $61,200 | 2020 | $137,700 |
| 1996 | $62,700 | 2021 | $142,800 |
| 1997 | $65,400 | 2022 | $147,000 |
| 1998 | $68,400 | 2023 | $160,200 |
| 1999 | $72,600 | 2024 | $168,600 |
| 2000 | $76,200 | 2025 | $176,100 |
Data source: Social Security Administration.
You'll need more than just a high salary
As noted, anyone looking to get the maximum they can from Social Security needs to wait until age 70 to get their biggest check possible. For those looking to receive the maximum possible benefit of anyone, they'll need to optimize a couple of other factors as well.
First of all, they have to keep working at least until the year before they turn 70. As mentioned, inflation adjustments for your wages will stop when you reach 60, but the contribution and benefit base continues to climb higher. As a result, you'll need to earn throughout your 60s to maximize your average earnings calculation.
On top of that, you have to be born in the right year. The SSA adjusts the bend points in the Social Security benefits formula for each cohort of retirees based on the year they were born. That typically leads to younger workers qualifying for a bigger benefit (all else being equal). So, only someone turning 70 this year can qualify for the 2025 maximum possible benefit. They won't be able to qualify for it next year. Those who were born in 1956 will be the ones collecting the maximum in 2026.
That said, it might not be worth squeezing out those last bits of possible optimizations. If you worked a long, high-paying career, you'll likely qualify for a very sizable benefit.
It's usually worth it for high earners to wait until 70 to start collecting benefits. Unless you have serious health concerns, the odds are good you'll end up collecting more in lifetime income from Social Security by waiting than collecting earlier. That's especially true if you have a spouse around the same age who could receive survivor benefits if you pass away first.
Qualifying for the maximum Social Security benefit is impractical, if not impossible, for many. But that doesn't mean you shouldn't try to optimize for making the most of the benefits you can receive.
