What is the Maximum Possible Social Security Benefit?

Like most people, you probably anticipate that Social Security will make up an important part of your retirement income. But how large can your monthly benefit payment actually be? That will be determined by a number of factors unique to your situation, but let’s take a look at the maximum possible benefit.

Keep in mind that these figures are adjusted during most years (when Social Security issues a Cost of Living Adjustment, or COLA). For 2019, the maximum possible benefit amounts are…

• $2,861 for a beneficiary who files for benefits at full retirement age (currently 66)
• $2,209 for a beneficiary who files for benefits at age 62
• $3,770 for a beneficiary who waits until age 70 to receive benefits

Remember, these are just 2019’s numbers, and they are likely to change over time.

Now, on to the bigger question: How does a person reach the maximum possible benefit amount?

Payments are calculated based upon a formula, which averages your 35 highest-earning years of employment. If you didn’t work at least 35 years, you will have zeros averaged into your formula, and this will bring down your overall figures. Working longer than 35 years, in some cases, can help to improve those averages if a longer career meant more years working at your peak earnings.

Also, Social Security taxes annual income based upon certain limits, which have changed over time. In 2019, the maximum taxable income for Social Security is $132,900. Earning more than this amount won’t help you reap a higher benefit amount later, but reaching that maximum each year will definitely improve your calculations.

Of course, you should remember that the maximum taxable income has changed over time. If you didn’t earn $132,900 per year 20 years ago, that doesn’t mean you can’t reach the maximum Social Security benefit now. The important thing is that you strove to reach the maximum taxable income each year, whatever it was during that particular year.

Not everyone can reach the maximum taxable income each year, nor will everyone work a full 35 years due to various factors. The underlying point is to keep these things in mind when making career decisions, because they will affect your eventual Social Security benefit amount. For more information on planning for Social Security and retirement in general, give us a call to schedule a personal appointment.