Understanding Social Security benefits can be complex, but one common question is how much money you will receive when you retire. While the exact amount varies for each individual, there is a maximum cap on monthly benefits for everyone.
The amount you receive from Social Security is determined by your lifetime earnings and the age at which you choose to start receiving benefits. To provide some clarity, we will outline the maximum monthly amount you can receive from Social Security when you retire and the income level required to reach that maximum.
The maximum amount of Social Security benefits you can receive each month is influenced by the age at which you begin receiving benefits. It’s important to note that you can choose to delay receiving benefits even after retiring from work. Here is a breakdown of the maximum monthly benefits based on the age you start receiving retirement benefits:
– Age 62: $2,572 monthly
– Age 65 to 67 (full retirement benefits age): $3,627 monthly
– Age 70: $4,555 monthly
The full retirement benefits age depends on your date of birth. For individuals born in 1960 or later, the full retirement age is 67.
In addition to the age factor, the Social Security Administration considers your highest 35 years of earnings to determine your benefit amount. For example, in 2023, if you want to receive the maximum Social Security benefit when you retire, you will need to have earned at least $160,200 over your lifetime.
It’s important to note that the maximum taxable amount changes annually, so it may be different when you retire. Income above the annual cap is not taxed and does not count towards your total earnings.
If there is a cost of living adjustment (COLA), you can expect a monthly increase in your Social Security checks. In 2023, there was a record increase of 8.7%, and it is projected to increase by 3.2% in 2024 due to inflation. Retirees can anticipate an average monthly increase of $58 in 2024.
For more information, you can refer to the Social Security payment schedule and the Social Security Disability Insurance payment schedule. Additionally, if you are a Supplemental Security Income beneficiary, you may be eligible for a second payment in September. Lastly, pausing your Social Security benefits now may result in receiving higher payments in the future.
