Each year that Social Security beneficiaries receive a COLA, some other important figures increase because of the COLA. One of these is the maximum benefit payable.
Do you know how the maximum Social Security retirement benefit is figured? When Social Security computes a retirement benefit, we index the earnings to the increase in the average wage in the country, average the highest 35 years of earnings together, and use a replacement formula to figure the amount of pre-retirement earnings to be replaced.
So, to receive the highest retirement benefit possible, each of the last 35 years has to have been at the taxable wage maximum. ( For example, the maximum taxable wage in 2017 is $127,200.) Not some of them or most of them, but to generate the maximum benefit, every year had to be at the highest level taxable.
This year the maximum Social Security benefit is $2788.00 for a worker retiring at full retirement age. That is an increase from $2687.00 in 2017.