The highest monthly Social Security benefit depends on when the person filed for benefits and how much they earned over their working career. The maximum Social Security benefit changes each year based on cost-of-living adjustments.
What is the maximum Social Security benefit in 2023?
In 2023, the maximum monthly Social Security benefit for someone filing for benefits at full retirement age is $3,627. That’s an increase of $150 over the maximum benefit amount in 2022.
To qualify for the maximum benefit amount, a person would need to have earned the maximum taxable income or more during at least 35 years of their working career. The Social Security Administration looks at a person’s 35 highest-earning years when calculating their benefit amount upon retirement.
So if someone earned the taxable maximum or more for at least 35 years of their career, they would qualify for the maximum monthly benefit of $3,627 in 2023 at full retirement age.
What is considered full retirement age?
Full retirement age (FRA) depends on when someone was born:
| Year of Birth | Full Retirement Age |
|---|---|
| 1943-1954 | 66 years |
| 1955 | 66 years, 2 months |
| 1956 | 66 years, 4 months |
| 1957 | 66 years, 6 months |
| 1958 | 66 years, 8 months |
| 1959 | 66 years, 10 months |
| 1960 or later | 67 years |
So for anyone born in 1943 or later, full retirement age is between 66 and 67 years old. If someone claims Social Security before or after their full retirement age, their monthly benefit amount will be reduced or increased accordingly.
How are benefits reduced for early filing?
Someone can start claiming Social Security retirement benefits as early as age 62, but their monthly benefit amount will be permanently reduced the earlier they claim.
Here are the benefit reductions for claiming Social Security before full retirement age:
| Start Age | Full Retirement Age | Benefit Reduction |
|---|---|---|
| 62 | 67 | 30% |
| 62 | 66 | 25% |
| 63 | 67 | 27.5% |
| 63 | 66 | 22.5% |
| 64 | 67 | 25% |
| 64 | 66 | 20% |
| 65 | 67 | 22.5% |
| 65 | 66 | 17.5% |
As the table shows, the reduction can be as high as 30% for someone with a full retirement age of 67 who claims benefits at 62. The earlier someone claims, the larger the reduction amount.
How are benefits increased for delayed filing?
Conversely, someone can delay claiming Social Security past their full retirement age in order to earn delayed retirement credits which boost their benefit amount. Benefits increase by 8% per year up to age 70 for anyone born in 1943 or later.
For example, say someone’s full retirement age is 67 and their benefit amount at that age is $2,000 per month. If they wait to claim at age 70, their monthly benefit would be 132% of $2,000, or $2,640 per month.
Delayed retirement credits reward people who wait longer to claim benefits by giving them a higher payout each month when they do finally file.
What is the highest possible Social Security benefit?
The absolute highest Social Security benefit goes to someone who earned maximum taxable wages for at least 35 years, waits until age 70 to claim benefits, and has a full retirement age of 67.
With delayed retirement credits, that person’s benefit could be as much as $3,870 per month in 2023. That’s 32% higher than the $3,627 maximum benefit payable at a full retirement age of 67.
Here is a summary of the key facts:
- Maximum Social Security benefit at full retirement age in 2023: $3,627 per month
- Full retirement age for anyone born 1960 or later: 67
- Delayed retirement credits for waiting until 70: 8% per year
- Maximum possible benefit in 2023 at age 70: $3,870 per month
Very few people actually end up getting the absolute maximum benefit amount. But it demonstrates how much higher payments can be for those who delay claiming and earn the maximum credits.
How are Social Security benefits calculated?
Social Security benefits are based on average indexed monthly earnings (AIME) over a worker’s 35 highest-earning years. The SSA adjusts or “indexes” earnings to account for changes in average wages over time.
To calculate AIME:
- Determine the worker’s earnings in each year of their career up to age 60.
- Adjust each year’s earnings to account for average wage changes.
- Identify the 35 highest earnings years.
- Total those earnings amounts.
- Divide by the number of months in 35 years (420) to determine the average indexed monthly earnings.
That AIME amount is then inserted into a formula to determine the primary insurance amount (PIA), which is the benefit payable at the worker’s full retirement age. The PIA formula gives proportionately higher benefits to workers with lower average earnings.
For example, a worker with an AIME of $4,000 would get a PIA around $1,888 per month at full retirement age. Meanwhile, someone with the maximum AIME would get the highest possible PIA and maximum benefit amount.
How much are the taxable maximum wages?
The Social Security Administration sets a cap each year on the amount of earnings subject to Social Security taxes. This is called the contribution and benefit base, but is more commonly referred to as the taxable maximum.
Earnings above the taxable maximum are not subject to Social Security taxes and are not counted when calculating benefits. This effectively puts a ceiling on the benefit amounts.
Here are the taxable maximum amounts over the last five years:
| Year | Taxable Maximum |
|---|---|
| 2019 | $132,900 |
| 2020 | $137,700 |
| 2021 | $142,800 |
| 2022 | $147,000 |
| 2023 | $160,200 |
As the taxable maximum rises each year with average wage growth, so does the maximum Social Security benefit.
How many years of work are required to get Social Security?
Workers need a minimum of 10 years of work history to qualify for Social Security retirement benefits. Benefits are based on an average of the 35 highest earning years, so having at least 35 years of earnings will maximize the benefit amount.
Someone with fewer than 35 years of earnings will have zero-income years factored into their average, resulting in a lower benefit amount. Working at least 35 years is advisable for the highest possible payment.
Can you collect Social Security from an ex-spouse?
Divorced people who were married for at least 10 years can collect Social Security benefits based on their ex-spouse’s work record, provided the ex-spouse qualifies for benefits. The amount the divorced person gets has no impact on the ex’s benefit.
To qualify for ex-spousal benefits, you must be unmarried and at least 62 years old. The benefit is up to 50% of what your ex-spouse gets at their full retirement age. So even if you never worked or qualified for benefits on your own, you may still be able to get payments if your ex qualified.
How are widow/widower benefits calculated?
Surviving spouses can receive Social Security survivor benefits based on the work record of their deceased partner. The amount depends on when the surviving spouse claims benefits:
- At full retirement age – 100% of deceased spouse’s benefit
- At age 60 – 71.5% of deceased spouse’s benefit
- At age 50 – 71.5% of deceased spouse’s benefit if disabled
- Any age – 75% of deceased spouse’s benefit if caring for child under 16
So at full retirement age or above, the surviving spouse gets 100% of the amount their deceased partner received or would have received upon retirement. The benefit is reduced if claimed earlier.
Can Social Security benefits be taxed?
Yes, Social Security benefits may be subject to income taxes depending on the recipient’s total combined income from all sources. This includes distributions from retirement accounts, non-Social Security pensions, wages, and more.
Up to 50% of Social Security benefits can be taxed if a recipient’s combined income is $25,000 to $34,000 for single filers or $32,000 to $44,000 for joint filers. And up to 85% can be taxed above those thresholds.
Can Social Security run out?
According to the most recent Social Security trustees report, the reserves that help fund the program are projected to run out by 2035. At that point, payroll tax revenue alone is estimated to support about 80% of scheduled benefits.
So while Social Security is not going away completely, benefits may have to be reduced in the future if Congress does not shore up the program’s finances. Proposals include raising the payroll tax rate, raising the taxable maximum, and reducing benefit growth rates.
Conclusion
The maximum Social Security benefit depends primarily on when someone chooses to claim and their lifetime earnings history. Benefits are highest for those who wait until age 70, earned the taxable maximum for at least 35 years, and have a full retirement age of 67.
Very few retirees actually end up getting the absolute maximum amount, which will top $3,800 per month in 2023. But understanding how benefits are calculated can help workers estimate their own Social Security payments in retirement.
With Social Security facing a long-term shortfall, some changes may be necessary to maintain solvency past 2035. But for now, benefits remain intact for the more than 65 million Americans receiving them each month.