Imagine going into retirement knowing that you'll have over $61,000 in guaranteed yearly income. For most people, this is more than enough to cover their bills in retirement and have enough left over to travel or do whatever will bring them joy in their golden years.
For those who will receive the maximum monthly Social Security benefit in 2025, this is the case. This year, the max monthly benefit is $5,108, or $61,296 annually. Unfortunately, qualifying for this amount is far from easy. If you have your sights on achieving the max benefit, there are two important things you must do.
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How Social Security calculates your benefits
To understand how to collect the maximum Social Security benefit, it helps to understand how the Social Security Administration (SSA) calculates benefits. Below is an overview of the three-step process:
- The SSA takes the 35 years when your earnings were the highest and adjusts them for inflation. If you have less than 35 years' worth of earnings, it'll replace any missing years with a zero.
- It adds up those 35 years of inflation-adjusted earnings and divides the sum by the number of months in that period to determine your average indexed monthly earnings (AIME).
- It applies a formula with bend points to your AIME.
The number it gets from this process is your primary insurance amount (PIA), which is the base monthly benefit you qualify for at full retirement age (FRA).
The salary you would need to achieve the max monthly benefit
The majority of Americans pay Social Security payroll taxes on their income. However, only a certain amount is subject to these taxes each year -- this amount is called the "wage base limit."
To be eligible to receive the maximum $5,108 benefit -- or whatever the maximum benefit is for a given year -- you need to have earned at least the wage base limit in each of the 35 years that the SSA uses to calculate your monthly benefit.
In 2025, the wage base limit is $176,100. If 2025 is a year that will be used in your benefits calculation, you'll need to have earned at least that much.
The wage base limit changes each year (with a few exceptions). Here is how it has looked over the past 10 years:
- 2024: $168,600
- 2023: $160,200
- 2022: $147,000
- 2021: $142,800
- 2020: $137,700
- 2019: $132,900
- 2018: $128,400
- 2017: $127,200
- 2016: $118,500
- 2015: $118,500
Earnings are only part of the equation
The earnings criterion is the hardest part to achieve, but it's not everything you need to receive the max monthly Social Security benefit. In addition to a high-income career, you must delay claiming benefits until you reach age 70.
Even if you have cleared the earnings hurdle, claiming at FRA would only qualify your for a max monthly benefit of $4,018 this year. However, the SSA increases your benefit amount by 2/3 of 1% for each month you delay your claim past FRA, so the high earners claiming once they turn 70 this year would be the only ones getting the $5,108 max benefit.
The table below can help you determine your FRA:
Image source: The Motley Fool.
Most people won't come close to receiving the max benefit
Delaying benefits until 70 is the relatively easy part of this process. It's the earnings requirement that will prevent most people from even coming close to receiving the max benefit.
According to the SSA, only around 20% of current and future covered workers are projected to earn above the wage base limit in at least one year. Now, imagine how hard it is to do so for at least 35 years.
If you find yourself falling short of the requirements, don't fret. The max benefit is not a realistic goal for most people. That said, you can still take steps to maximize what Social Security you do qualify for while also saving for retirement in a 401(k), IRA, or brokerage account.
