In 2023, the highest achievable monthly Social Security benefit stands at $4,873, serving as a testament to its significance as a retirement benefit.
This amount is indicative of the benefits exclusively accessible to individuals with among the highest incomes in the nation.
Factors Impacting Your Social Security Benefit
Your Social Security benefit is determined by various factors, including your age and the duration of your career.
To attain the maximum monthly payment, you must have made adequate contributions to the program over time through payroll taxes.
The Social Security Administration (SSA) computes your benefits based on your 35 highest-earning years, adjusting earnings to reflect changes in wage levels.
If your work history spans fewer than 35 years, you may not qualify for the maximum benefit.
Age also plays a crucial role. For instance, individuals born in 1960 or later who opt to claim Social Security benefits at the earliest eligibility age of 62 will receive a benefit 30% lower than if they were to retire at the full retirement age of 67.
However, delaying the acceptance of benefits beyond the full retirement age results in an increase in benefits by a certain percentage for each month of delay, up to age 70.
Extending your working years can significantly impact your benefits.
Federal Payroll Tax: Supporting Social Security
Social Security funding primarily relies on a federal payroll tax, obliging individuals to contribute 6.2% of their wages, while employers are mandated to match this percentage for the same earnings.
For self-employed individuals, the responsibility extends to covering both portions, resulting in a 12.4% contribution.
These tax obligations pertain solely to a delimited segment of annual earnings, referred to as the benefit base, which undergoes periodic adjustments to align with overall wage fluctuations across the US workforce.
Currently, the benefit base stands at $168,600.
This six-figure threshold significantly complicates the endeavor to maximize Social Security benefits.
Achieving the full extent of monthly payments necessitates earning at least the benefit base for 35 years and retiring at age 70.
To provide context, the median weekly earnings for full-time salaried workers in the third quarter of 2023 amounted to $1,118, translating to an annual income of $58,136, as reported by the US Bureau of Labor Statistics.
