What is the most I can receive from my Social Security retirement benefit?


According to the Social Security Administration (SSA), the maximum Social Security benefit that a person filing a claim for Social Security retirement benefits in 2021 can receive per month is as follows:

  • $ 3,895 for someone applying at age 70
  • $ 3,113 for someone applying at full retirement age (FRA)
  • $ 2,324 for someone filing at 62

Key takeaways

  • Qualifying for Social Security at age 62 requires 10 years of work or 40 work credits.
  • For someone of full retirement age, the maximum amount is $ 3,113, and for someone 62 years old, the maximum amount is $ 2,324.
  • The absolute maximum Social Security benefit that a person can receive per month in 2021 is $ 3,895, and to obtain it you must apply at age 70.

How Social Security Works

Qualifying for Social Security in the first place requires 40 work credits or approximately 10 years of work. If you have 40 work credits, you are eligible to claim Social Security once you turn 62. However, your FRA depends on the year of your birth.

For example, if you were born in 1960 or later, your FRA is 67; If you were born between 1943 and 1954, it is 66. You will receive 100% of your benefits if you wait until your FRA claims them. If you claim earlier, you will receive less. If you claim at age 70, you get an 8% bonus for every year it takes you to claim.

Social Security benefits are calculated by combining your highest paid 35 years (if you worked for more than 35 years). First, all wages are indexed to account for inflation. Previous year wages are multiplied by a factor based on the years each wage was earned and the year the claimant turns 60. This calculation gives an amount comparable to purchasing power based on the current value of the dollar. This change in valuation is important to consider, because a salary of $ 14,000 was much more impressive in 1954 than it is today.

Once all wages have been indexed, Average Indexed Monthly Earnings (AIME) is calculated by dividing the sum of all indexed wages by 420 (35 years expressed as months: months you did not work, if you worked less than 35 years are calculated as zeros). The benefit amount is then calculated based on factors including the year collection begins, whether the claimant has met the FRA, and whether the claimant continues to work while receiving benefits.

Done quick

Social Security is designed to replace about 40% of your pre-retirement income.

Example of maximum social security benefits

Let’s say someone who turns 62 in 2021 will reach the FRA at 66 years and 10 months, with earnings that make them eligible at that time for a monthly benefit of $ 1,000. Opting to receive benefits at age 62 will reduce your monthly benefit by 29.2% to $ 708 to account for the longest time you could receive benefits, according to the Social Security Administration. This decrease is usually permanent.

If that same person expects to receive benefits until age 70, the monthly benefit increases to $ 1,253. The greater amount is due to delayed retirement credits earned by the decision to postpone receiving benefits after the FRA. In this example, that higher amount at age 70 is approximately 77% more than the benefit they would receive each month if benefits began at age 62, or a difference of $ 545 each month.

A calculator from the Social Security Administration can give you more personalized information. Of course, the best time for someone to start receiving Social Security benefits depends on a variety of factors, not just the dollar amount of the benefit. Things like current income and employment status, other available retirement funds, and life expectancy should also be factored into the decision.

Advisor Insight

Marguerita M. Cheng, CFP®, CRPC®, RICP, CDFA
Executive Director of Blue Ocean Global Wealth, Gaithersburg, Maryland.

According to the Social Security Administration (SSA), the maximum benefit paid at full retirement age (FRA) in 2021 is $ 3,113. Note that this is the maximum benefit in FRA, but it can defer your benefits and increase your Social Security benefit. Here are some examples:

  1. Julia Child retires and delays applying for benefits two years beyond her FRA. She will receive a monthly benefit 16% greater than the amount of her primary insurance (PIA): (2/3) x 24 = 16%. By deferring her benefits, Julia permanently increased her FRA benefit from $ 1,400 to $ 1,624.
  2. James Brown retires and delays applying for benefits four years beyond his FRA. You will receive a monthly benefit 32% greater than your PIA: (2/3) x 48 = 32%. By deferring his benefits, James permanently increased his FRA benefit from $ 1,600 to $ 2,112.
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