What is the maximum I can receive from my Social Security retirement benefit?
The maximum monthly Social Security benefit payment for a person retiring in 2016 at full retirement age is $2,639. However, the maximum allowable benefit amount is only payable to those who had the maximum taxable earnings for at least 35 working years. Depending on when you retire and how much you made while working, your benefits may be considerably less. The estimated average monthly benefit for "all retired workers" in 2016 is $1,341.
Social Security benefits are calculated by combining your 35 highest-paid working years (if you worked for more than 35 years). First, all wages are indexed to account for inflation. Wages from previous years are multiplied by a factor, based on the years in which each salary was earned and the year in which the claimant reaches age 60, to give an amount comparable in buying power based on the current value of the dollar. Accounting for this valuation change is important, because a salary of $14,000 was far more impressive in 1954 than it is today.
Once all wages have been indexed, the Average Indexed Monthly Earnings, or AIME, is computed by dividing the sum of all indexed wages by 420 (35 years of months – so months when you didn't work, if you worked fewer, than 35 years are figured in as zeros). The benefit amount is then calculated based on factors such as the year in which collection begins, whether the claimant has reached full retirement age and whether the claimant continues to work while collecting benefits.
In addition, the age at which you retire can affect your benefit amount greatly. If you retire at age 66 in 2016, your maximum benefit will be $2,639. However, if you have reached age 67 or older, you will be granted credits for your deferred retirement. In 2016, deferred retirement earns an additional 8% per year over full retirement age, up to age 70, meaning that if you retire at age 69 in 2016, your benefits will be 24% higher than those for someone retiring at 66 with the same earnings history. On the other hand, should you decide to collect benefits before you reach full retirement age, your benefits will be reduced to account for the additional years over which total benefits must spread. For example, if you were born in 1960 or later and your full retirement age is 67, retiring at age 62 would reduce your benefit by 30%. Click here for a Social Security calculator that can give you more personalized information.
The answer depends on which age you file for the social security benefits. For example, assume your full retirement age (FRA) is 66, and the maximum benefit for the FRA in 2016 is $2,639 per mo. Say, if you’re 62 & contemplate to file for an early benefit, you may only get 75% of the full benefit, which is $1,979/mo. On the other hand, if you delay the claim to age 70, you will earn 132% increase, which is $3,483/mo. You can login to the social security website to find out specifically how much your potential benefits may be at various ages. Keep in mind, if your work passes your claiming age, your benefits may be adjusted for an even higher amount, so will the cost of inflation adjustment, but the government will make that decision. Best!
Thank you for the question. Your social security benefit is based upon your earning years essentially. If you maxed out the social security earnings scale then, if you retired in 2016, you would be able to get $2,639 a month. Check out this article to learn more about how your benefit would be calculated, etc.
You can also Estimate Your Benefits by going to the Social Security website and answering some questions about yourself and your income, it will give you a good idea of what to expect when you retire.
Please consider me a resource should you have any additional questions.
Your maximum Social Security payment in 2016 is:
1) $2,638 at Full Retirement Age
2) $2,102 at age 62 (your earliest claiming age)
3) $3,576 at age 70
If you can wait until age 70, that not only gives you the highest benefit, but also gives your spouse (if you are married) the highest survivor benefit at your death. Check out Social Security's website (www.ssa.gov) for lots of great information. Good luck!
That depends on your retirement age. If you were born between 1943 – 1954 then as a percentage, if you retired at your normal retirement age (NRA), you receive 100% of your benefit which in $ terms the max is $2,639. If you retired at age 70 (max retirement age) then you will receive 132% of your normal retirement age benefit, which the max amount for that age is $3,576. Here is a link for the effect of early or delayed retirement https://www.ssa.gov/oact/ProgData/ar_drc.html
Additionally, remember that Social Security is derived using the income you earned (indexed for inflation) and the amount of years you worked. Therefore in order to receive the maximum payment, you would have had to earn the maximum taxable earnings for at least 35 years.
Please use this link from the Social Security Administration for more information https://www.ssa.gov/oact/quickcalc/early_late.html