Do you want the maximum Social Security benefit of $4,555? Here is the salary you need

(Keith Speights)

The countdown is on. It’s only a matter of days before Social Security benefits increase. While all retirees who receive Social Security will enjoy a nice raise, some will earn more than others.

The maximum monthly Social Security retirement benefit currently stands at $4,194. That amount will increase to $4,555 in 2023. Do you want this maximum Social Security benefit? Here is the salary you need.

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A not so simple answer

If you retire in 2023, your salary will need to be $160,200 to get the maximum Social Security retirement benefit. That is the highest amount Social Security taxes will be paid on.

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But earning $160,200 over the next year won’t be enough on its own. The Social Security Administration (SSA) uses your highest earnings over 35 years to calculate your retirement benefit.

No, you do not have to earn at least $160,200 over 35 years during your career. The Social Security payroll tax cap has changed significantly over time. However, because of this, there is no single salary level you must earn to receive the maximum monthly benefit of $4,555. Instead, there are 35 different salary levels that you must have achieved in the past.

The following table shows the maximum amount taxed for Social Security for each year since 1973. You can see for yourself if you earned enough over 35 years to receive the maximum Social Security retirement benefit.

Year Profits Year Profits
1973 $10,800 1999 $72,600
1974 $13,200 2000 $76,200
1975 $14,100 2001 $80,400
1976 $15,300 2002 $84,900
1977 $16,500 2003 $87,000
1978 $17,700 2004 $87,900
1979 $22,900 2005 $90,000
1980 $25,900 2006 $94,200
1981 $29,700 2007 $97,500
1982 $32,400 2008 $102,000
1983 $35,700 2009 $106,800
1984 $37,800 2010 $106,800
1985 $39,600 2011 $106,800
1986 $42,000 2012 $110,100
1987 $43,800 2013 $113,700
1988 $45,000 2014 $117,000
1989 $48,000 2015 $118,500
1990 $51,300 2016 $118,500
1991 $53,400 2017 $127,200
1992 $55,500 2018 $128,400
1993 $57,600 2019 $132,900
1994 $60,600 2020 $137,700
nineteen ninety five $61,200 2021 $142,800
nineteen ninety six $62,700 2022 $147,000
1997 $65,400 2023 $160,200
1998 $68,400

Data source: Social Security Administration.

Other key requirement

There is another key prerequisite for receiving the maximum Social Security retirement benefit that you should be aware of. You cannot retire early at age 62. You can’t even retire to your full retirement age, which is 67 for anyone born in 1960 or later. To earn the maximum of $4,555 per month, you must wait until age 70 to claim your Social Security retirement benefits.

However, many Americans don’t last until they are 70 years old. Only 10.2% do, according to a recently published article by the National Bureau of Economic Research (NBER). That’s usually not the best financial move. In fact, the NBER study found that claiming Social Security retirement benefits before age 70 resulted in an average lifetime loss of more than $182,000.

The maximum may not be enough

Aiming for the maximum Social Security retirement benefit is a laudable goal. However, the maximum still might not be enough to retire comfortably. The maximum monthly benefit of $4,555 for 2023 is $54,660 per year. That’s just 34% of the aforementioned $160,200 salary.

The reality is that most Americans will need to save for retirement in other ways rather than relying solely on Social Security. It is advisable to start saving as soon as possible. Regardless of when you plan to retire, the countdown is on.

The $18,984 Social Security bonus that most retirees completely overlook

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