Current:Home > FinanceIs the max Social Security benefit a fantasy for most Americans in 2023?-LoTradeCoin
Is the max Social Security benefit a fantasy for most Americans in 2023?
View Date:2024-12-23 16:28:13
What's the highest possible Social Security retirement benefit? The Social Security Administration (SSA) has an answer to that question. For 2023, it's $4,555 per month.
For many Americans, that amount would go a long way toward ensuring a comfortable retirement. But is the $4,555 max Social Security benefit really a fantasy?
What does it take to hit the max?
You only have to complete three requirements to make the maximum Social Security retirement benefit. Let's start with the easiest one: Work for 35 years.
Why 35 years? The SSA uses your highest-earning 35 years to calculate your retirement benefit.
Most Americans will be able to check off this box without any problem. It's important to note, though, that some jobs aren't eligible for Social Security benefits (notably including some state, county and municipal jobs). As a result, any years working in those jobs won't count toward the 35 years of earnings that SSA uses in its benefits calculation.
Next is a requirement that could be more challenging for some. To hit the max Social Security benefit, you'll need to delay collecting retirement benefits until age 70. If you hoped to retire early and still make the highest benefit possible, you're out of luck.
But the third requirement is the hardest of all. You'll need to earn the maximum taxable amount in each of the 35 years used in the calculation of your Social Security retirement benefit. The following table shows the maximum taxable amount going back 50 years. If any of your highest-earning 35 years falls short of these amounts, you won't make the maximum $4,555 per month.
Data source: Social Security Administration. Table by author.
It's possible, but not probable.
It's possible to make the $4,555 max Social Security benefit. It's also possible to bowl a perfect game, hit a hole-in-one in golf, and get Wordle on the first try. But it's not probable that you'll do any of them.
A recent survey conducted by asset management company Schroders found that only 10% of Americans who haven't retired yet plan to wait until age 70 to collect Social Security benefits. This number is similar to the percentage of retirees last year who waited until age 70 or later to receive retirement benefits.
The SSA estimates that nearly 20% of current and future Social Security beneficiaries will earn more than the taxable maximum in at least one year. However, only around 6% of covered workers earn more than the taxable maximum in any given year. There isn't any readily available data about how many people have achieved this for 35 years, but it's probably fair to assume that the percentage is much lower.
Here's what isn't a fantasy.
Unfortunately, making the maximum Social Security retirement benefit is only a fantasy for many Americans. What isn't a fantasy, though, is boosting your benefit as much as possible.
The most straightforward way to do this is to hold off on receiving benefits until age 70. This will increase your monthly benefit by 24%, compared to collecting benefits at a full retirement age of 67. It could also help by replacing lower-earning years from earlier in your career with higher-earning years later in your career.
The Motley Fool has a disclosure policy.
The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY.
Offer from the Motley Fool:The $21,756 Social Security bonus most retirees completely overlook If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $21,756 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.
veryGood! (41)
Related
- South Carolina to take a break from executions for the holidays
- Elevate Your Wardrobe With the Top 11 Trending Amazon Styles Right Now
- Do you live in one of America's fittest cities? 2023's Top 10 ranking revealed.
- These Secrets About Sleepless in Seattle Are Like... Magic
- BITFII Introduce
- Former Sub Passenger Says Waiver Mentions Death 3 Times on First Page
- How (and why) Gov. Ron DeSantis took control over Disney World's special district
- TikTok to limit the time teens can be on the app. Will safeguards help protect them?
- Patrick Mahomes Breaks Silence on Frustrating Robbery Amid Ongoing Investigation
- How 4 Children Miraculously Survived 40 Days in the Amazon Jungle After a Fatal Plane Crash
Ranking
- Gerry Faust, former Notre Dame football coach, dies at 89
- ‘Suezmax’ Oil Tankers Could Soon Be Plying the Poisoned Waters of Texas’ Lavaca Bay
- Elon Musk apologizes after mocking laid-off Twitter employee with disability
- Amber Heard Makes Red Carpet Return One Year After Johnny Depp Trial
- Pitchfork Music Festival to find new home after ending 19-year run in Chicago
- Farming Without a Net
- Deaths of 4 women found in Oregon linked and person of interest identified, prosecutors say
- Inside Clean Energy: The Energy Storage Boom Has Arrived
Recommendation
-
Harriet Tubman posthumously honored as general in Veterans Day ceremony: 'Long overdue'
-
Arnold Schwarzenegger Is Full Speed Ahead With Girlfriend Heather Milligan During Biking Date
-
Shop 50% Off Shark's Robot Vacuum With 27,400+ 5-Star Reviews Before the Early Amazon Prime Day Deal Ends
-
CBOhhhh, that's what they do
-
Ex-Marine misused a combat technique in fatal chokehold of NYC subway rider, trainer testifies
-
General Motors is offering buyouts in an effort to cut $2 billion in costs
-
Indigenous Tribes Facing Displacement in Alaska and Louisiana Say the U.S. Is Ignoring Climate Threats
-
A U.S. federal agency is suing Exxon after 5 nooses were found at a Louisiana complex