Claiming the $4,555 Maximum Monthly Social Security Benefit in 3 Easy Steps. Your monthly Social Security benefit in retirement is intricately linked to your career choices and retirement planning. The government program’s payout upon claim is determined by the sum of your 35 highest-earning years, adjusted for inflation. Achieving the maximum monthly benefit of $4,555 (which increases to $4,873 in 2024) requires careful consideration and strategic steps.
Step 1: Secure a 35-Year Work History
To optimize your Social Security benefit, aim to work at least 35 years. The Social Security Administration calculates your retirement benefit based on the average of your 35 highest-earning years. If you work fewer years, the system fills in the gaps with zeros, lowering your average.
Working into your 60s is advantageous, as the administration stops adjusting your earnings for inflation at 60. Additionally, your earning potential is usually higher in your 60s, potentially boosting your benefit even if you’ve completed 35 years by age 61.
Step 2: Maximize Taxable Income Yearly
To attain the maximum Social Security retirement benefit, consistently pay the maximum Social Security tax for at least 35 years. Social Security taxes apply to applicable wages up to a specified yearly value, adjusted for inflation. In 2023, this amount is $160,200, and any earnings above it are exempt from Social Security taxes.
Here’s a table showing the earnings threshold for the last 50 years.
| YEAR | EARNINGS | YEAR | EARNINGS |
|---|---|---|---|
| 1973 | $10,800 | 1999 | $72,600 |
| 1974 | $13,200 | 2000 | $76,200 |
| 1975 | $14,100 | 2001 | $80,400 |
| 1976 | $15,300 | 2002 | $84,900 |
| 1977 | $16,500 | 2003 | $87,000 |
| 1978 | $17,700 | 2004 | $87,900 |
| 1979 | $22,900 | 2005 | $90,000 |
| 1980 | $25,900 | 2006 | $94,200 |
| 1981 | $29,700 | 2007 | $97,500 |
| 1982 | $32,400 | 2008 | $102,000 |
| 1983 | $35,700 | 2009 | $106,800 |
| 1984 | $37,800 | 2010 | $106,800 |
| 1985 | $39,600 | 2011 | $106,800 |
| 1986 | $42,000 | 2012 | $110,100 |
| 1987 | $43,800 | 2013 | $113,700 |
| 1988 | $45,000 | 2014 | $117,000 |
| 1989 | $48,000 | 2015 | $118,500 |
| 1990 | $51,300 | 2016 | $118,500 |
| 1991 | $53,400 | 2017 | $127,200 |
| 1992 | $55,500 | 2018 | $128,400 |
| 1993 | $57,600 | 2019 | $132,900 |
| 1994 | $60,600 | 2020 | $137,700 |
| 1995 | $61,200 | 2021 | $142,800 |
| 1996 | $62,700 | 2022 | $147,000 |
| 1997 | $65,400 | 2023 | $160,200 |
| 1998 | $68,400 | 2024 | $168,600 |
Note that only wages subject to Social Security taxation count, excluding income from investments or non-Social Security-covered work, such as government jobs.
[irp]Step 3: Exercise Patience-Wait Until Age 70
Delaying your Social Security claim until age 70 yields significant advantages. Although eligibility begins at 62, waiting until 70 accrues delayed retirement credits, increasing your benefit by 8% for each year beyond your full retirement age. This strategy ensures a higher payout.
Keep in mind that the full retirement age is increasing, with those born in 1960 or later having a full retirement age of 67. Delayed retirement credits are capped at a 24% increase for this group. Furthermore, it’s essential to note that credits cease after age 70, making it the optimal age to maximize your retirement benefit.
Focus on the Controllable Factors
While you have control over your career choices and retirement timing, external factors, such as the state of the Social Security Trust Fund, remain uncertain. The fund is projected to exhaust its reserves by 2034, potentially leading to a 23% cut in benefits if a solution is not found. While advocating for Social Security is crucial, directing your focus toward optimizing your benefit through career decisions and strategic claiming is within your power.
[irp]Conclusion
Mastering the three steps to claiming the $4,555 maximum monthly Social Security benefit empowers individuals to navigate retirement strategically. By focusing on controllable factors, one can optimize their benefit despite uncertainties surrounding the Social Security Trust Fund’s future.
