The maximum Social Security benefit in 2020 is $3,790 per month if retiring at age 70. The max Social Security benefit per month is $3,011 for retirement at age 66; $2,857 for retirement at age 65; and $2,265 for retirement at age 62.
How is the maximum Social Security benefit calculated?
The amount you get from Social Security every month depends on the size of your lifetime earnings and your retirement age. The more you earn and the longer you wait to claim Social Security, the bigger the monthly check.
The Social Security Administration looks at how much money you earned over time and adjusts those earnings for inflation. Up to 35 of your highest-earning years, stopping at age 60, are considered to calculate your average monthly earnings — this is called your average indexed monthly earnings (AIME).
After that, a formula is applied that gives you a percentage of those lifelong earnings as your benefit payment. The payment you receive if you wait until you reach normal retirement age is called your primary insurance amount.
Essentially, the income you earned in, say, 1993 is revised to reflect what that wage would be nowadays before Social Security determines your benefit. (You're also eligible for cost-of-living benefit increases starting the year you turn 62, even if you don't take your benefits until later.)
As shown in the table below, your 35-year average indexed monthly earnings would need to be $8,864 at age 70 in order to get the maximum Social Security benefit of $3,790. Few people receive these max payouts. At the end of 2019, the average monthly Social Security check was for $1,503.
Maximum Social Security benefit by retirement age
Maximum benefit per month
Average indexed monthly earnings needed to get maximum benefit
» MORE: How Social Security is taxed
How to maximize your retirement income
Social Security alone likely won’t be enough money for many people when they retire, which is one reason that saving for retirement is so important. You can boost your retirement income by putting money into tax-advantaged savings vehicles such as an individual retirement account.
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How an IRA works
An individual retirement account (IRA) is a kind of tax-deferred or tax-free retirement account that you can get at many financial institutions. You can use it to invest in stocks, bonds and other assets.
Two of the most popular types of accounts — the traditional and the Roth — allow you to add $6,000 per year ($7,000 if you’re 50 or older), even if you’re also contributing to a workplace savings plan such as a 401(k).
With a traditional IRA, you may be able to deduct your contributions, which can reduce your tax bill in the year you contribute. With a Roth IRA, you can't deduct your contributions, but your investments grow tax-free and you can withdraw money tax-free in retirement.