What is the Maximum Social Security Benefit? – 2020 Guide

The maximum Social Security benefit an individual can receive depends on the age at which the person retires. In this post, we will explain in detail what the maximum monthly Social security benefit is, according to the age you retire.

We will then provide the maximum benefit amounts for 2020.

This Post about Social Security Maximum Benefit will cover:

  • What is the Maximum Social Security Benefit?
  • 2020 Maximum Social Security Benefit
  • Top 5 Social Security Retirement Questions

"What is the Maximum Social Security Benefit"

What is the Maximum Social Security Benefit?

With a formula based on your average earnings over the course of your career, Social Security calculates how much you’ll be eligible to receive if you claim your benefits at various ages.

Because that formula takes a limited amount of earnings into account in making its calculations, there’s a maximum amount of Social Security benefits that recipients can get each month.

The maximum possible Social Security benefit changes depending on the age you retire.

The amount declines if you start collecting Social Security Benefits before your full retirement age, while someone who delays retirement until age 70 can collect a higher monthly benefit.

2020 Maximum Social Security Benefit

The maximum Social Security benefit changes from year to year, based on factors like inflation and changes in the amount of earnings taken into account for Social Security payroll taxation.

According to the Social Security Administration (SSA) the maximum monthly Social Security benefit that an individual who files a claim for Social Security retirement benefits in 2020 is:

$3,770 for someone who files at age 70.
$2,861 for someone who files at full retirement age (currently 66).
$2,209 for someone who files at 62.

For comparison, the average Social Security retirement benefit in 2019 is $1,461 a month while the average Social Security disability benefit is $1,234.

Top 5 Social Security Retirement Questions

Here are the top five Social Security questions we get regarding retirement benefits.

How Do I Get the maximum Social Security benefit?

Here are the 4 steps you can take to get the maximum social security benefit:

1. Delay Receiving Benefits

Social Security retirement benefits increase by roughly 7% each year that you delay between the earliest age at which you can claim benefits – 62, and your full retirement age.

The full retirement age is currently 66 and rising to 67 for people born in 1960 and later. Most people are better off delaying.

Many financial planners encourage their clients to tap other resources, such as retirement funds, if that allows them to start collecting Social Security benefits closer to their full retirement age.

2. Work Longer

Social Security is based on a worker’s 35 highest-earning years. You may be able to boost your benefit by working longer if you’ll earn enough to replace one of your lower-paid years with a higher-paid one.

People who took time off to raise families or otherwise had breaks in their employment could find working longer to be especially helpful in increasing their benefit.

3. Earn more

Another way to increase your future Social Security check is to earn the maximum income for as many years as you can.

Earning the maximum income in 2020 means you’ve earned $137,700 or more, which is the maximum amount of income subject to the 6.2% Social Security payroll tax.

If you earn the maximum income in all 35 of your highest-earning years, you’ll qualify for the maximum Social Security benefit at your full retirement age.

4. Consider Your Spouse’s Benefit Amount

Some lower-earning spouses could get more from taking a spousal benefit than from taking their own retirement benefit.

Spousal benefits can be as much as 50% of what the higher earner gets at his or her full retirement age. The amount is discounted if either spouse starts benefits early.

Typically, the higher-earning spouse needs to be receiving a retirement benefit for the other partner to get a spousal benefit.

Previously, the higher earners could “file and suspend” to let their own benefits grow, but that’s no longer an option.

The video below from PBS News Hour does a great job with tips and tricks for getting the most from Social Security. It will be definitely worth your time to watch the entire video.

What is the Full Retirement Age?

Under the original Social Security Act of 1935, workers had to reach age 65 to receive a full retirement benefit.

However, in 1983, Congress passed legislation to increase the full retirement age to 67.

This was to ensure that the Social Security trust fund does not run out of money.

It was also due to the fact that seniors were living longer, and thus collecting benefits over a longer period of time than when the Social Security Act was originally passed.

However, to make the change fair for seniors who were soon to retire, Congress decided to stretch the implementation over a 22-year period, with an 11-year hiatus at which the retirement age will remain at 66.

The table below shows the full retirement age based on the year you were born.

Year of BirthFull Retirement Age
1937 or earlier65
193865 and 2 months
193965 and 4 months
194065 and 6 months
194165 and 8 months
194265 and 10 months
195566 and 2 months
195666 and 4 months
195766 and 6 months
195866 and 8 months
195966 and 10 months
1960 and later67

What is the Social Security Wage Limit?

When you start collecting Social Security benefits, you can still work while collecting your benefits.

However, if you haven’t reached your full retirement age, part or all of your Social Security payments could be temporarily withheld.

Beneficiaries who are working but have not reached their full retirement age (age 66 for people born in 1943 through 1954) will be docked $1 in benefits for every $2 in earnings above $1,520 a month, or $18,240 a year.

However, A worker who turns 66 in 2020 can earn up to $4,050 a month before his or her birthday, without losing benefits.

Above that threshold, the worker will lose $1 in benefits for each $3 earned. Once you reach full retirement age, you can earn as much as you like without losing Social Security benefits at all.

What is the Social Security Tax Limit?

Most workers pay 6.2 percent of their earnings into the Social Security system and employers match this amount.

Self-employed workers contribute 12.4 percent of their paychecks.

However, there is a limit on taxable income for Social Security tax purposes.

This is called the Social Security tax limit, which changes every year based on the cost of living adjustment (COLA).

For 2020, earnings that exceed $137,700 are not taxed by Social Security or used to calculate retirement payments. This is up from $132,900 for 2019. 

How is Social Security Funded?

American workers pay Social Security taxes on their income. It’s an automatic deduction that’s based on what you earn. The more you earn, the more you pay.

However, there is a tax cap for high-income earners. In 2020 Social Security taxable maximum is $137,700.

This means, if you’re not self-employed, you’ll only be taxed on wages of up to $137,700.

Maximum Social Security Benefit Summary

We hope this post on the Maximum Social Security Benefit was helpful.

If you have further questions about Social Security retirement benefits, please let us know in the comments section below.

Be sure to check out our other articles on Social Security including Social Security Full Retirement Age, How to Create a mySocialSecurity Account, and Social Security Questions and Answers.

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