Here’s what it will take, and what you can do whether or not you’ll be cashing these biggest possible retirement checks.
If you’re reading this then you likely already know the biggest-possible monthly benefit that retirees will be receiving from the Social Security Administration in 2024 is $4,873, up from 2023’s figure of $4,555.
How many people are actually collecting these maximum-sized checks anyway? Not many. Most people will see markedly smaller payments even if they were above-average earners in most of their working years.
Who’s collecting these big Social Security payments anyway?
Current and future retirees must meet three requirements if they’re going to get the maximum monthly Social Security benefit of $4,873 in 2024.
The first two of the three criteria are simple enough. Only retirees who are at or above the age of 70 when they file for benefits are eligible for Social Security’s biggest retirement benefits, and only those individuals who have earned at least 35 full years’ worth of work-based wages will qualify for the maximum monthly payment. Everyone else? Forget about it.
The thing is, even if you meet the first of these two requirements, the third criteria may very likely knock you out of contention. The third standard requires you to be a well-above-average earner when you’re working for those 35 years.
What does that mean in terms of dollar amounts? It depends on the year in question. The threshold is raised every year largely in step with inflation. This year’s number is $160,200 in taxable wages. Last year the figure was $147,000. Next year’s minimum is $168,600. You’ll have needed to earn comparable inflation-adjusted amounts for at least 35 years to secure $4,873 checks every month from Social Security; the table below lays out every year’s minimum taxable earnings figure going back to 1985.
| YEAR | TAXABLE INCOME CAP | YEAR | TAXABLE INCOME CAP |
|---|---|---|---|
| 1985 | $39,600 | 2005 | $90,000 |
| 1986 | $42,000 | 2006 | $94,200 |
| 1987 | $43,800 | 2007 | $97,500 |
| 1988 | $45,000 | 2008 | $102,000 |
| 1989 | $48,000 | 2009 | $106,800 |
| 1990 | $51,300 | 2010 | $106,800 |
| 1991 | $53,400 | 2011 | $106,800 |
| 1992 | $55,500 | 2012 | $110,100 |
| 1993 | $57,600 | 2013 | $113,700 |
| 1994 | $60,600 | 2014 | $117,000 |
| 1995 | $61,200 | 2015 | $118,500 |
| 1996 | $62,700 | 2016 | $118,500 |
| 1997 | $65,400 | 2017 | $127,200 |
| 1998 | $68,400 | 2018 | $128,400 |
| 1999 | $72,600 | 2019 | $132,900 |
| 2000 | $76,200 | 2020 | $137,700 |
| 2001 | $80,400 | 2021 | $142,800 |
| 2002 | $84,900 | 2022 | $147,000 |
| 2003 | $87,000 | 2023 | $160,200 |
| 2004 | $87,900 | 2024 | $168,600 |
DATA SOURCE: SOCIAL SECURITY ADMINISTRATION.
The good news is, there’s no requirement that you had to have earned these amounts in the most recent 35 years in question, or even earned these amounts sequentially. As long as you met or eclipsed these thresholds in any 35 years before filing, you’re at least possibly eligible for the maximum monthly check of $4,873.
You can make the retirement fantasy your reality
Don’t beat yourself up if you aren’t (or aren’t going to be) cashing the biggest checks the Social Security Administration writes to retirees. You’re hardly alone. Indeed, less than 14% of Social Security’s retirement beneficiaries collect anything above $2,600 per month, and the bulk of them are banking figures far closer to $2,600 than $4,873. The average payment this year is roughly $1,800, and a wide swath of recipients are seeing monthly checks somewhere between $900 and $1,500.
Don’t sweat it too much if you’re one of the many folks who isn’t or won’t be eligible for these oversize checks. There’s still plenty you can do on your own with wages much less than the Social Security Administration’s yearly taxable income thresholds to set you up with a respectable retirement nest egg for later in life. The key is just doing a little number-crunching. That is, figure out what you think you’ll need to live on when you retire, then figure out how much money it will require to produce that amount in the future, and then determine how much you’ll need to regularly save between now and then to reach your goal.
Let’s work through an example to illustrate the idea.
Let’s say your retirement income goal is $5,000 per month. Reliably — and perpetually — generating that amount of money from dividends and interest payments will require on the order of $1.5 million. But how do you save up $1.5 million? It depends on how much time you have to save and grow your money while you’re contributing to the retirement fund. Assuming you’re investing in the stock market, saving $750 per month for 30 years will do the trick. If you’ve got 40 years, a mere $300 per month will get you there. If you’ve only got 20 years to reach your goal of $1.5 million, you’ll need to save around $2,000 every month. Obviously the early you get started, the better!
Even if you don’t get an early start or can’t tuck away that much money right now, however, at least start somewhere. Something is better than nothing!
Also bear in mind that even if you’re not on track to collect Social Security’s biggest checks, you’ll likely be getting something from the Social Security Administration when you’re ready to retire.
Only worry about what you can do something about
The point is, there’s actually not a whole lot more you can realistically do to secure the maximum monthly Social Security payments in retirement than you’re already doing. Earning more income, working more years, and waiting longer to claim benefits sounds great. But it’s much easier said than done.
It just doesn’t matter quite as much as you think it might.
See, although participation the Social Security program is compulsory, it generally returns far less than the returns you would normally be able to achieve investing your Social Security contributions in the stock market on your own (if that were an option). That’s why you’ll still want to invest as much as you can from however much of your paycheck is left after deducting FICA contributions from your wages. You may end up finding you don’t even care how big your eventual Social Security check is or isn’t going to be.
