Here's the Max Social Security Benefit for Retirees in 2024, and the Salary You Need to Get It

A recent survey from MassMutual found that 4 in 10 workers aged 55 to 65 expect Social Security benefits to be their largest source of income in retirement. That aligns precisely with historical trends. Research from the Social Security Administration shows that 40% of individuals aged 65 and older received at least half of their income from benefits in 2015.

Those statistics make it critical that workers get as much income from the program as possible. But there is a problem: Very few workers can correctly identify the factors that determine the maximum payout, and that knowledge gap can have a substantial impact on living standards later in life.

Read on to see the maximum Social Security benefit in 2024, and to learn the salary retired workers need to qualify for the biggest payout.

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The maximum Social Security benefit for retired workers in 2024

The Social Security benefits formula is modified each year based on changes in the national average wage index. The upshot of those modifications is that the maximum payout tends to increase over time to account for wage inflation. For instance, the maximum monthly Social Security benefit for retired workers at age 70 is $4,555 per month in 2023, up from $4,194 per month in 2022.

The chart below shows the maximum monthly Social Security benefit for retired workers at different claiming ages in 2024.

Data source: The Social Security Administration.

As shown above, claiming age has a substantial impact on retirement benefits. All else being equal, a worker who claims Social Security at age 70 in 2024 could receive 80% more than a retired worker who starts benefits at age 62.

But claiming age is not the only important variable.

The salary retired workers need to get the maximum Social Security benefit

Social Security benefits are based on work history, lifetime income, full retirement age or FRA, and claiming age. Those four variables come together in a two-step process to determine how much income a retired worker gets from Social Security.

The abbreviated version of that two-step process is: (1) determine the primary insurance amount or PIA, and (2) adjust the PIA for early or delayed retirement. Each step is discussed in more detail below.

Step 1: A worker becomes eligible for Social Security retirement benefits at age 62. At that point, the Social Security Administration averages the inflation-adjusted income from the 35 years during which they made the most money. The benefits formula is then applied to that average to determine the PIA, which is the benefit the worker would receive if they claimed Social Security at their FRA.

There is one important caveat: Income above the maximum taxable earnings limit is excluded from the calculation. So any worker with income exceeding the taxable maximum for 35 years will qualify for the maximum Social Security benefit. But the taxable maximum tends to increase each year to account for changes in general wage levels.

The chart below shows the maximum taxable earnings limit over the last decade.

Data source: The Social Security Administration.

As shown above, $168,600 is the salary required to qualify for the maximum Social Security benefit in 2024. But readers should bear in mind that qualifying for the biggest payout requires that income exceeds the taxable maximum for 35 years.

Step 2: As mentioned, workers who claim Social Security at their FRA will receive their PIA. But benefits are permanently reduced for those who claim earlier, and they are permanently increased for those who claim later. In other words, workers who start Social Security before their FRA get less than 100% of their PIA, and workers who delay Social Security until after their FRA get more than 100% of their PIA. The only caveat is that delayed retirement credits stop at age 70, so claiming any later would be nonsensical.

The precise reduction for early retirement depends on exactly how many months early Social Security starts, but it could be as large as 30%. For instance, a retired worker born in 1960 would only receive 70% of their PIA if they claimed Social Security at age 62.

Similarly, the precise increase for delayed retirement depends on exactly how many months late Social Security starts, but it could be as large as 32%. For instance, a retired worker born in 1954 would receive 132% of their PIA if they claimed Social Security at age 70.

Anyone can use this calculator from the Social Security Administration to determine the precise impact of early or delayed retirement based on their individual circumstances.

Not many workers will get the maximum Social Security benefit

Last year only 7% of workers made more money than the taxable maximum, and the percentage who will hit that mark in 35 different years is even smaller. That means very few people will qualify for the maximum Social Security benefit. But future retirees should still understand the concepts discussed in this article, because little changes like earning extra money or delaying benefits will ultimately increase the final payout.