Social Security: Here’s the Maximum Possible Benefit at Ages 62, 67, and 70 The Motley Fool

Under both situations, most workers are required to contribute Social Security taxes up to IRS limits. If you are self-employed, you pay Social Security taxes as part of the quarterly estimated taxes you submit to the Internal Revenue Service (IRS). According to the Social Security Administration (SSA), an average of 70.6 million people per month received Social Security benefits, on average, of $1,681 per month in 2022. Benefit recipients received a slightly larger amount of $1,848 in 2023 due to the cost-of-living adjustment.

Individuals will receive an average of $1,907 in their SSA benefits, and couples will receive, on average, $3,033 in 2024, thanks to the COLA increase.
Having money saved in additional retirement funds can supplement your Social Security benefits, which may allow you to hold off until later before collecting the benefits.
If you don’t have a My Social Security Account, it may be a good idea to open one.

In recent years, you need to earn a six-figure salary to get a top Social Security payment. When you’re ready to apply for retirement benefits, use our online retirement application,
the quickest, easiest, and most convenient way to apply. Focus, instead, on what you can do to increase your benefit as much as possible. But if you’ll depend on Social Security for a significant part of your retirement income, you’re probably not going to come anywhere close to the maximum benefit. In order to get the biggest Social Security check, you have to wait even longer and take advantage of delayed retirement credits. The higher-earning spouse will receive a more significant benefit amount, which will grow over time, resulting in a more significant total cash.

Foreign government employees and nonresident aliens may also not be required to pay Social Security taxes. Lastly, individuals who don’t make enough money may also not end up paying Social Security. If you work as an employee in the United States, your employer will deduct Social Security taxes as part of your payroll. If you are self-employed, you are responsible for remitting your own Social Security taxes.

People who earn six figures or more can typically afford to sock away plenty of money in a retirement account. If you don’t work for 35 years, it’s impossible to collect the maximum benefit because your earnings will be entered as “$0” for the years you didn’t work. However, working more than 35 years can help you get a bigger benefit if you can replace some of those lower-earning years with higher earnings.

Rules About Social Security Maximums

If you claim at age 70, vs. at FRA, you get an 8% bonus for each year that you delayed claiming. The proportion of women among retired-worker beneficiaries quadrupled between 1940 and 2021. The percentage climbed from 12% in 1940 to 47% in 1980, 48% in 1990, and 51% in 2021.

Self-employed individuals are responsible for both portions of the tax.
In 2023, the maximum taxable amount is up to $160,200 of income ($168,600 in 2024).
You’ll need to be a high earner over many decades and delay receiving benefits to potentially become one of a small handful to bag $4,555 per month.
That’s the most a family can collectively receive from Social Security (including retirement, spousal, children’s, disability or survivor benefits) on one family member’s earnings record.
Individuals who earn more than $200,000 are also subject to a 0.9% additional Medicare tax.

We do not manage client funds or hold custody of assets, we help users connect with relevant financial advisors. Social Security AdministrationOur mission is to deliver Social Security services that meet the changing needs of the public. A financial professional will offer guidance based on the information provided and offer a no-obligation call to better understand your situation. Someone on our team will connect you with a financial professional in our network holding the correct designation and expertise. Ask a question about your financial situation providing as much detail as possible.

Maxing out Social Security checks is getting a little harder next year.

Almost 57% of SSI recipients aged 65 or older received OASDI benefits, as did 27.7% of those aged 18–64 and 6.2% of those under age 18. Other types of unearned income, such as income from assets, were reported most frequently among those under age 18 (21.6%) and those aged 65 or older (10.0%). A total of 7.7 million persons received federally administered SSI payments. States have the option of supplementing the federal benefit rate and are required to do so if that rate is less than the income the recipient would have had under the former state program. You need to earn at least the taxable maximum each year for 35 years to get the maximum possible Social Security payment.

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Although men historically were more likely than women to be insured, the gender gap is shrinking. The proportion of men who are insured declined slightly from 1970 to 2021, with 91% fully insured and 80% insured for disability in 2021. By contrast, the proportion of women who are insured increased dramatically—from 63% to 88% fully insured and from 41% to 76% insured for disability. However, qualifying for payments worth $3,000 or more requires some serious career planning throughout your life.

Maximum Social Security Benefit FAQs

Employees whose compensation exceeds the current 2021 taxable earnings cap of $142,800 may notice a slight decrease in net take-home pay beginning next January due to the payroll tax adjustment. The age at which you begin claiming has an enormous effect on the amount you’ll receive each month. Even if you meet all the other requirements for the max payments, filing before age 70 could knock your checks down substantially. The Social Security Administration calculates your benefit by taking an average of your earnings over the 35 highest-earning years of your career. That number is then adjusted for cost-of-living changes, and the result is the amount you’ll receive if you file at your full retirement age (FRA). Under limited circumstances, some individuals may claim a qualifying religious exemption or temporary student exemption.

Social Security Matters

Currently, the Social Security tax rate is 6.2% for the employer and 6.2% for the employee. Now let’s say also that the couple has an adult child who, because of a disability, is also eligible to be paid 50% of the primary breadwinner’s benefit. This would come to another $1,000 and, added to the benefits paid to the primary breadwinner and non-working spouse, bring the family’s total benefit to $4,000.

86% of Supplemental Security Income (SSI) recipients received payments because of disability or blindness in 2021. If you work for more than 35 years, a higher-earning year will replace a year when you earned less in the Social Security calculation. You can increase your Social Security payments even after you retire if you earn more now than you did earlier in your amortization of financing costs career. The maximum earnings that are taxed have changed through the years as shown in the chart below. If you earned more than the maximum in any year, whether in one job or more than one, we only use the maximum to calculate your benefits. Founded in 1993, The Motley Fool is a financial services company dedicated to making the world smarter, happier, and richer.

Of that amount, 90.1% was from payroll tax contributions and reimbursements from the General Fund of the Treasury and 3.5% was from income taxes on Social Security benefits. Interest earned on the government bonds held by the trust funds provided the remaining 6.4% of income. Assets decreased in 2021 because expenditures for benefit payments and administrative expenses exceeded total income. Among retired and disabled workers who collected benefits based on their own work records, men received a higher average monthly benefit than did women.