Those who work long, high-paying careers can receive thousands of dollars above the average Social Security benefit.
Adam Levy
| The Motley Fool
December Social Security payments, key dates, updates
Here are the key dates for December Social Security payments and the latest updates, including a 2.8% cost-of-living adjustment for January.
The average Social Security retirement beneficiary is expected to receive a monthly payment of about $2,064 in 2026, based on the most recent data provided by the Social Security Administration. But some beneficiaries will receive much more.
Those with long, highly paid careers, can receive thousands of dollars more each month from the government retirement program. But there are several factors that will determine exactly how much more. Here’s the theoretical maximum possible Social Security benefit for retirees at every age from 62 to 85 for 2026.
The biggest factors affecting your Social Security benefit
Before determining the maximum possible benefit for each age group, it’s important to understand, at least at a base level, how the government calculates your benefit.
The first step the Social Security Administration takes when calculating your benefit is to determine your average indexed monthly earnings, or AIME. It takes your entire earnings history and adjusts each year’s taxable wages and self-employment income for wage inflation tied to an index level from the year you turned 60. Any earnings after age 60 don’t get an inflation adjustment. It then selects the 35 highest inflation-adjusted earnings years and determines their monthly average. That’s your AIME.
Your AIME is then plugged into the Social Security benefits formula to determine your initial primary insurance amount, or PIA. The formula’s bend points are also indexed to wage inflation and set the year you become eligible for Social Security (at age 62).
The year you were born plays a significant role in determining the fundamental factors underlying your Social Security benefit. As a result, the maximum possible benefit will vary depending on what year you were born.
The result of the Social Security benefits formula is your primary insurance amount, or PIA. But the SSA will adjust your PIA every year based on a couple of factors. If you had earnings in a given year, the SSA will recalculate your AIME, which could affect your PIA. In addition, your PIA gets an annual cost-of-living adjustment. The COLA applies whether you’ve claimed benefits already or not.
The final step in determining your Social Security benefit is assessing a penalty for early claimants or credits for those who delay their application. If you claim before your full retirement age, you’ll receive less than your PIA. The penalty is also affected by when you were born, as Congress increased the full retirement age from 65 to 67, affecting those born after 1937. You’ll receive a credit as a percentage of your PIA for each month you delay benefits up to age 70.
How to max out Social Security
The Social Security Administration puts a limit on how much of your earnings are subject to Social Security tax in a given year. If you earn above that limit, only the amount subject to tax is eligible for calculating your AIME. The limit gets adjusted for wage inflation each year. If you continuously earn above that limit every year, you’ll be eligible for the maximum possible benefit for your age.
Here’s a table showing the maximum taxable earnings for Social Security over the last 40 years.
Data source: Social Security Administration.
Here’s the important detail about maxing out Social Security retirement benefits. To receive the maximum possible, you must keep earning at or above the maximum taxable earnings limit each year. That’s because the SSA will recalculate your benefit every year based on your prior year’s earnings. In all likelihood, earning more than the maximum taxable earnings will displace one of your lowest earning years, especially since earnings stop receiving inflation adjustments once you turn 60.
Here’s the maximum possible Social Security retirement benefit for ages 62 through 85
If you’ve continuously worked in a high-paying career, racking up at least 35 years of earnings at or above the taxable limit, you may be in line for the maximum possible benefit in 2026 for your age group.
The Social Security Administration doesn’t publish maximums for every age group. It only publishes the maximum possible for ages 62, 65, 66, 67 and 70 in any given year. It also provides COLA adjustments for maximum, but that doesn’t account for continued earnings beyond a given age. Therefore, I calculated the theoretical maximum possible benefit for each age group based on their AIME, assuming they continued working through 2025.
The table below shows the maximum possible Social Security benefit at each age, according to my calculations.
*Claim at 62 and 1 monthCalculations by Author.
For many people, it’s impractical to aim for the maximum possible Social Security benefit. Unless you absolutely love your job and continue to perform at a high level, it probably makes sense to take a more traditional retirement.
Even if you’re not in line for the maximum possible benefit, it should be helpful to understand how continuing to work in your 60s, 70s and beyond could affect your Social Security benefits. If you find yourself in a highly compensated position today after a slow start to your career, you may find it beneficial to work an extra year or two before claiming Social Security. You can use various online tools, including the Social Security Administration’s online calculator, to help determine whether it makes sense to keep working or retire now.
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