What Is It, How Is It Figured?

The utmost Social Safety retirement profit that you may obtain is dependent upon the age while you start accumulating and your earnings historical past, amongst different elements. In 2022, the utmost is $3,345 per 30 days for somebody who recordsdata at full retirement age (FRA) at age 66. However $4,194 is absolutely the highest profit for individuals who qualify and delay claiming till age 70.


Key Takeaways

  • Qualifying for Social Safety requires 10 years of labor or 40 work credit.
  • For somebody at full retirement age (FRA), the utmost profit is $3,345.
  • Absolutely the most profit that a person can obtain per 30 days in 2022 is $4,194, and to get it, it’s essential to wait till age 70 to assert advantages and have been a excessive earner for 35 years.

How Social Safety Advantages Are Calculated

Qualifying for Social Safety within the first place requires 40 work credit or roughly 10 years of labor. To be eligible to obtain the utmost profit, you should earn Social Safety’s most taxable revenue for 35 years. The cap, which is the quantity of earnings topic to Social Safety tax, is $160,200 in 2023, up from $147,000 in 2022.

Social Safety advantages are calculated by combining your 35 highest-paid years (when you labored for greater than 35 years). First, all wages are listed to account for inflation. Wages from earlier years are multiplied by an element based mostly on the years after they have been earned. This calculation provides an quantity comparable to purchasing energy based mostly on the present worth of the greenback. Accounting for this valuation change is vital as a result of a wage of $14,000, for instance, was much more spectacular in 1954 than it’s at present.

As soon as all wages have been listed, your common listed month-to-month earnings (AIME) is computed by dividing the sum of all listed wages by 420 (35 years expressed as months). For those who labored fewer than 35 years, a zero is entered for years while you didn’t work. The profit quantity is then calculated based mostly on elements that embody the 12 months when assortment begins, whether or not you’ve gotten reached FRA, and whether or not you proceed to work whereas accumulating advantages.

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When you have 40 work credit, you might be eligible to assert Social Safety as early as age 62, however ready till FRA will end in a a lot greater profit. Essentially the most that you may obtain in 2023 when you begin accumulating at age 62 is $2,572. Your FRA is dependent upon the 12 months of your start. For instance, when you have been born in 1960 or later, your FRA is 67, and when you have been born within the 1943–1954 years, it’s 66. (However not simply 66. For instance, for these born in 1956, FRA is 66 and 4 months.). You’ll obtain 100% of your advantages when you wait till your FRA to assert them. For those who declare at age 70, vs. at FRA, you get an 8% bonus for annually that you just delayed claiming.

When you attain age 70, there isn’t a purpose to attend longer to begin accumulating—your profit gained’t enhance additional.

The right way to Get the Most Social Safety Profit

Few individuals obtain the utmost Social Safety verify from the federal government. To defy this and doubtlessly change into one in every of a small handful to bag $4,194 per 30 days, you’ll should be a excessive earner over many many years and delay receiving the advantages.

The guidelines is as follows:

  1. Earn not less than the utmost wage taxable by Social Safety over 35 years: Social Safety takes your 35 highest-paid inflation-adjusted years and averages them collectively to compute your advantages. To be in with an opportunity of getting the max, you’ll have to contribute the max, which adjusts yearly based mostly on the nationwide common wage index, throughout this timeframe.
  2. Elect to begin receiving Social Safety advantages at age 70: Social Safety advantages will be accessed as early as age 62. Nevertheless, to get the utmost, you’ll want to attend till you’re 70.

How To Get the Most Social Safety Profit You’ve got Earned

Say that somebody who turned age 62 in 2021 will attain FRA at 66 years and 10 months, with earnings that make them eligible at that time for a month-to-month good thing about $1,000. Opting to obtain advantages at age 62 will scale back their month-to-month profit by 29.2%, to $708, to account for the longer time that they might obtain advantages, in line with the Social Safety Administration (SSA). That lower is often everlasting.

If that very same particular person waits to get advantages till age 70, their month-to-month profit will increase to $1,253. The bigger quantity is as a result of delayed retirement credit earned for the choice to postpone receiving advantages previous FRA. On this instance, that greater quantity at age 70 is about 77% greater than the profit that they might obtain every month if advantages began at age 62—a distinction of $545 every month.

In fact, the very best time for somebody to begin taking Social Safety advantages is dependent upon quite a lot of elements, not simply the greenback quantity of the profit. Issues akin to present revenue and employment standing, different obtainable retirement funds, and life expectancy additionally should be factored into the choice.

Common Social Safety Cost by Age

The typical Social Safety retirement profit is considerably decrease than the utmost. It was $1,628.17 per 30 days in September 2022, in line with the latest information obtainable from the SSA. Right here’s what the typical profit seems to be like at completely different ages for individuals who began accumulating at FRA, in line with an annual report revealed by the SSA in 2021.

Common Social Safety Profit by Age
Age Common Month-to-month Profit
66 $1,745.14
67 $1,719.23
68 $1,739.24
69 $1,736.43
70 $1,728.79
71 $1,751.26
72 $1,786.89
73 $1,792.45
74 $1,825.03
75 $1,793.63
76 $1,801.90
77 $1,818.23
78 $1,829.57
79 $1,824.08
80 $1,805.93
81 $1,763.16
82 $1,740.47
83 $1,703.41
84 $1,657.44
85 $1,636.90
86 $1,369.43
87 $1,350.42
88 $1,354.06
89 $1,345.23
90 or older $1,344.76

Supply: Social Safety Administration


How a lot of your preretirement revenue Social Safety is designed to exchange.

To make sure that advantages keep their shopping for energy, the SSA adjusts them yearly in accordance with modifications in the price of residing, For instance, the cost-of-living adjustment (COLA) was elevated by 8.7% for 2023, in contrast with a 5.9% enhance in 2022 and a 1.3% enhance for 2021.

Advisor Perception

Marguerita M. Cheng, CFP®, CRPC®, RICP, CDFA
CEO of Blue Ocean International Wealth, Gaithersburg, Md.

In response to the Social Safety Administration (SSA), the utmost month-to-month profit paid at full retirement age (FRA) in 2022 is $3,345. Keep in mind that that is the utmost profit at FRA, however you may defer your advantages and enhance your Social Safety profit. Listed here are two examples:

  1. Julia Little one retires and delays claiming advantages two years past her FRA. She is going to obtain a month-to-month profit 16% bigger than her main insurance coverage quantity (PIA): (2/3) × 24 = 16%. By deferring her advantages, Julia completely elevated her $1,400 FRA profit to $1,624.
  2. James Brown retires and delays claiming advantages 4 years past his FRA. He’ll obtain a month-to-month profit that’s 32% bigger than his PIA: (2/3) × 48 = 32%. By deferring his advantages, James completely elevated his $1,600 FRA profit to $2,112.

What Is Full Retirement Age (FRA)?

Full retirement age (FRA) is the age if you find yourself eligible to gather full Social Safety retirement advantages, and it’s based mostly on the 12 months while you have been born. The FRA is 66 years and two months for these born in 1955 and progressively will increase to 67 for these born in 1960 and after.

What Is the Common Social Safety Profit?

In September 2022, the typical Social Safety retirement profit was $1,628.17 per 30 days, in line with the Social Safety Administration (SSA). The utmost for that 12 months is $3,345 per 30 days for somebody who recordsdata at full retirement age (FRA) at age 66 and have been excessive earners for 35 years.

What Are Delayed Retirement Credit?

For those who wait previous your FRA to gather Social Safety retirement advantages, you’ll obtain credit for every month that you just delay, as much as age 70. These credit can enhance your month-to-month fee by 8% a 12 months.

How A lot Do You Have To Make To Get Most Social Safety?

To obtain the utmost Social Safety profit, you would want to earn not less than the utmost wage taxable by Social Safety for 35 years and delay claiming the profit till you attain 70. The earnings cap adjusts yearly based mostly on modifications to the nationwide common wage index and is $160,200 in 2023, up from $147,000 in 2022.

Is Social Safety Based mostly on the Final 5 Years of Work?

No, that’s not true. Social Safety advantages are based mostly in your 35 highest-paid inflation-adjusted years and consider the age while you begin receiving advantages.

The Backside Line

The utmost Social Safety profit for 2022 is $4,194 per 30 days or $50,328 per 12 months. Nevertheless, earlier than rubbing your fingers collectively, it’s vital to remember that most individuals have little to no probability of getting something close to that a lot.

The typical month-to-month payout within the U.S. in September 2022 was about $1,628 per 30 days. For those who hope to get considerably greater than that and obtain the utmost, you’ll want to attend till you attain 70 to obtain Social Safety advantages and be a persistently excessive earner for 35 years.