Several factors affect your Social Security benefits, especially during the current unpredictable economic state, and your salary is just one of them. It’s important to note that your benefit amount is not based on your last year or two in the workforce but on your lifetime earnings, so even if you made a lot of money in your most recent pre-retirement years, you might not get the maximum benefit amount.
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Here is how you can get the maximum Social Security benefit.
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How Social Security Benefits Are Calculated
The Social Security Administration (SSA) calculates your benefit amount by considering your lifetime earnings and then adjusting actual earnings to account for changes in the average wages since the year earnings were received. Your benefit is based on the adjusted average monthly earnings during the 35 years in which you earned the most.
This average is plugged into a formula to find the “primary insurance amount” — the benefit amount you would receive at your full retirement age.
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What Salary Is Needed To Receive the Maximum Benefit?
In 2025, to receive the maximum Social Security benefit, a person needs to have a history of consistently earning at least the annual maximum taxable wage cap, which is $176,100.
However, if you want to truly get the highest possible amount, you must also delay claiming benefits until age 70. If you do, you would get about $5,108 per month.
This is up from last year, as $168,600 was the salary needed to receive the maximum benefit. The SSA takes your 35 highest-earning years and averages them (adjusted for inflation) to determine your benefit. If, via this calculation, you have paid the taxable maximum over this time span, you may be eligible for the maximum benefit.
What Is the Maximum Social Security Benefit?
The maximum benefit depends on the age you retire.
If you retire at your full retirement age in 2025, which is age 66 to 67 depending on the year you were born, your maximum benefit would be $4,043. However, if you retire at age 62, your maximum benefit would be $2,831, or as previously mentioned, if you wait and retire at age 70, your maximum benefit would be $5,108.
Gabrielle Olya contributed to the reporting for this article.
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This article originally appeared on GOBankingRates.com: Here’s the Salary You Need To Make To Get the Maximum Social Security Benefit
