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How Big Can a Social Security Check Be?

By John Maxfield – Updated Oct 27, 2016 at 8:59AM

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There is in fact a limit to how big one's Social Security check can be.

This article was updated on Sept. 22, 2016.

As many people know, the size of one's Social Security retirement check is first and foremost a function of how much the person earned over their working life. More specifically, it derives from an inflation-adjusted average of the person's 35 highest-earning years. The more he or she earned, the bigger his or her check will be.

While this implies that there's no limit to the size of one's check, the Social Security Administration has in fact imposed one. During the current year, the maximum monthly retirement benefit for someone who retires at their full retirement age is $2,639.

You can see the historical trend in the maximum benefit in the chart below, which tracks the size of the monthly check of a retiree who applies for benefits at age 65 after a career in which they earned the maximum taxable amount since the age of 22.

If you take more than a cursory glance at this chart, you may notice a few anomalies. Namely, at certain points, the figure actually declines. In 2006, for instance, the maximum benefit was $2,385, while in 2007 it dropped to $2,352.

This isn't because the maximum allowable benefit at full retirement actually drops, as it does in fact continue to grow on a nominal basis. The reason is instead because the data set (which is provided by the Social Security Administration as an illustration of the trend in maximum monthly benefits) adjusts for inflation and focuses on the maximum benefit due at age 65, which, since 2003, is no longer the prevailing full retirement age.

The same thing explains why the maximum Social Security check in 2016, fell compared to last year's. In 2015, it was $2,663. This year, it's $2,639.

That aside, the point is clear: As a general rule, over the last roughly three decades, the maximum allowable retirement benefit has grown in accordance with cost-of-living adjustments.

This does not mean it's impossible to get monthly checks that exceed the maximum allowable amount. However, to do so, you'll have to accrue delayed-retirement credits.

The cap on benefits relates specifically to the amount a retiree is due upon reaching full retirement age -- which, at present, is between 66 and 67 years depending on when you were born. If someone waits longer than that to receive Social Security, their benefits will grow by 8% per year until they reach age 70, for a total increase of up to 32%. In 2015, for instance, that meant the maximum monthly benefit at the age of 70 was actually $3,515 as opposed to $2,663.

The point is straightforward: There's a limit to how much support you'll receive from Social Security. Therefore, unless you're comfortable with the idea of lowering your standard of living after you no longer draw a paycheck, it's important to cultivate other sources of income during your working years that you can later rely on in retirement.

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