When Do You Receive The Maximum Social Security Retirement Benefit?

There are always lots of questions about the amount of the maximum retirement benefit. Maybe a more meaningful question is “How do you get the maximum Social Security retirement benefit?”

To understand what the “maximum” really means, we need to look at how Social Security computes a benefit. Once you have earned the required 40 work credits, Social Security figures your benefit based on your lifetime earnings.  It is a 3 step process. The first step indexes your earnings to give credit for increases in the national average wage. Next, we average together your highest 35 years of earnings. There is a taxable limit for each year you work and no earnings over that limit are either taxed or used in figuring the benefit. The last step uses a replacement formula to replace a portion of your pre-retirement earnings. For a more detailed explanation, read our publication, “Your Retirement Benefit: How It Is Figured” at https://www.ssa.gov/pubs/.

So, under what circumstances would you receive the “maximum” benefit”? To yield the highest possible benefit at your full retirement age, earnings would have had to be at the taxable limit for each year used in the computation.  The taxable limit is the highest amount we use for any year when computing the benefit.

The maximum retirement benefit in 2017 is $2687. That amount comes from having paid the FICA tax while working on the highest taxable wage in each of the highest 35 years we average together.

You can check out your own earnings using your my Social Security account:  https://www.ssa.gov/myaccount/.