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Want the Max $4,873 Social Security Benefit? Here’s the Salary You Will Need.

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Want the Max ,873 Social Security Benefit? Here’s the Salary You Will Need.

Maximizing your monthly Social Security benefit could be the difference between making ends meet in retirement and really enjoying your golden years. But the key to maximizing Social Security starts while you’re still working.

The size of your monthly benefit is determined by several factors, including how much you earned during your career. If you earn a high enough salary for long enough, you can receive the maximum possible benefit. That’s $4,873 per month in 2024, and it’ll climb even higher in the future.

Here’s the salary you need to qualify for the maximum Social Security benefit.

A check from the United States Treasury in an envelope.

Image source: Getty Images.

The number to aim for

Every year, the Social Security Administration puts a cap on wages subject to the Social Security tax. If you earn that amount or more, you’ll put yourself in a position to receive the maximum possible Social Security benefit in retirement.

For 2024, the SSA set that wage limit at $168,600.

That’s a high bar. The Social Security Administration estimates only 6% of Americans earn above that amount.

But there’s more to the story. You can’t just earn above that wage limit one time. The Social Security Administration averages your 35 highest-earning years when calculating your Social Security benefit. So, you need to max out the salary for at least 35 years.

The wage limit hasn’t always been so high. The Social Security Administration adjusts it based on average wages every year. This means you’ll likely have to earn even more to max out Social Security in the future.

Here’s the wage limit for the last 50 years.

Year

Earnings

Year

Earnings

1975

$14,100

2000

$76,200

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

Data source: Social Security Administration.

There’s more to it than just earning a high salary

Getting the maximum benefit requires more than earning enough in 35 years. You also have to wait until age 70 to claim your benefits. Besides factoring in how much you earned during your career, the Social Security Administration also determines the size of your monthly benefits check based on when you make your claim. If you claim earlier, you’ll receive a smaller check; claim later, and you’ll receive a bigger check. Your monthly benefit doesn’t grow any larger after reaching age 70, though, so it rarely makes sense to delay beyond that age.

Waiting to claim can make a huge difference. The maximum possible benefit in 2024 for someone age 62 is just $2,710. That’s nearly a 45% pay cut from the $4,873 maximum for someone with the right salary history claiming at age 70. Granted, the 62-year-old would be able to collect benefits during their 60s, but it usually works out that delaying benefits increases the total amount you collect over your lifetime.

Even if you’re not in line to receive the maximum monthly benefit from Social Security, you should consider delaying until 70 to maximize the benefit you do receive. And if you have an opportunity to keep working and earning a higher salary, you could improve your monthly benefit even further.

It’s important not to get hung up on getting the maximum Social Security benefit. Consistently saving and investing for the long run can do a lot more to improve your finances in retirement than a bigger Social Security check.

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Want the Max $4,873 Social Security Benefit? Here’s the Salary You Will Need. was originally published by The Motley Fool

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