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What Is the Maximum Social Security Retirement Benefit?

Maximum Social Security Retirement Benefit

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Jessica Martel
Updated March 7, 2023
3 Min Read

The average worker can expect their Social Security payments to cover approximately 40% of their pre-retirement income. With many financial experts recommending you have enough retirement savings to replace 80% of your pre-retirement income, that leaves a pretty big gap.  

However, Social Security benefits are not designed to be the only source of retirement income. The purpose of social security is to replace a percentage of your pre-retirement income based on your lifetime earnings. How much you receive in retirement is determined by two main factors – when you start collecting benefits and your earnings history.  

The maximum Social Security benefit depends on two factors

The maximum social security retirement benefit you can receive depends on the age when you start collecting benefits as well as your lifetime earning history. 

Those that are able to delay claiming their Social Security until age 70, have worked for at least 35-years and earned a high income will receive the highest amount of social security. The maximum amount for 2022 is $4,194 per month. Those that start receiving Social Security before full retirement age and were lower-income earners or had many breaks in their career can expect to see a lower overall benefit amount. 

What is classified as “full retirement age” (FRA) depends on the year you were born. In 2022, those born in 1954 or earlier qualify for full retirement age at 66 years old. The FRA gradually rises to age 67 for anyone born in 1960 or later. Improvements in senior health and increases in average life expectancy were cited by Congress as the primary reasons for increasing the FRA. 

If you choose to delay when you start receiving Social Security, your benefits will increase by a certain percentage depending on your birth year. Your payments will automatically increase from the time you reach FRA until the time you start receiving benefits or reach age 70, whichever comes first. 

You can also choose to take your retirement benefits early, starting at age 62. In this case, your benefits are reduced by approximately 0.55% for each month you receive benefits before reaching FRA. For instance, if you want to start taking your payments at age 62 and you don’t reach FRA until age 67, you will only receive about 70% of your fill benefit. 

How is the Social Security retirement benefit calculated? 

The amount of Social Security benefits you receive is based on your lifetime earnings. To achieve the highest amount of Social Security, you need to have worked for at least 35 years. Your 35 highest-earning years are used to calculate your average monthly earnings. So, if you’ve worked for more than 35 years, your lowest earning years are dropped from the calculation. All earnings before your 60th birthday are also indexed for inflation.

If you don’t have 35 years of work, zeros are used to calculate your average monthly earnings. For instance, if you worked 32 years, then your income for those 32 years is used in addition to three zeros to represent the three years where you didn’t earn any income. 

If you’re over 22 years of age, the Social Security Administration has a Social Security Benefits Calculator you can use to get a rough estimate of how much you can expect in today’s dollars and in inflated future dollars. 

How do you get the maximum social security benefit?

To get the maximum Social Security retirement benefit, there are three criteria you need to meet:

  • Work history: You must work at least 35 years in a job where you are contributing to Social Security. 
  • Earnings: To receive the maximum amount, you will need to earn at least the taxable maximum during 35 of your working years. For instance, in 2022, you need to earn $147,000 (up from $142,800 in 2021) to meet the maximum taxable income threshold.
  • Age: You will need to delay receiving Social Security until age 70 if you want to receive the maximum benefits. 

What is the average Social Security check amount?

The estimated average monthly Social Security amount for all retired workers in 2022 is $1,657, or about $19,884 per year. This is hardly enough money to support a comfortable retirement. However, if you also have a solid amount of retirement savings in a pension and savings and investments, you can use the extra benefit to afford the retirement you’ve always wanted. This is what Social Security was designed for. These benefits are meant to act as a foundation upon which you can build your retirement with different sources of income.

With soaring inflation rates, you might wonder if the government is doing anything to ensure Social Security payments keep up with the times. In a October 2021 press release, the government announced a 5.9% cost-of-living adjustment (COLA) in Social Security benefits in 2022. Without this increase, the average Social Security check would come in at $1,565.

Are you saving for retirement? 

While the Social Security retirement benefit is a great source of additional retirement income, you shouldn’t rely on it to cover all of your expenses. The 2022 maximum amount of $4,194 per month might sound like a reasonable amount but, the average American is receiving much less.  If you have dreams of traveling in retirement or pursuing new hobbies, you’ll need money to do so. If you haven’t started saving for retirement, make today the day you start. Your future self will thank you!