Do you want the maximum Social Security benefit of $4,555? Here is the salary you need
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.
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.
|nineteen ninety five||$61,200||2021||$142,800|
|nineteen ninety six||$62,700||2022||$147,000|
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
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 up to $18,984 more… every year! Once you know how to maximize your Social Security benefits, we believe you’ll be able to retire with confidence and the peace of mind we all seek. Just click here to find out how to learn more about these strategies..
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