What is the maximum Social Security benefit?

What determines your Social Security benefits?

To qualify for Social Security, you need to have 40 work credits. This is equivalent to about a total of 10 years of work.

Social Security benefits depend on a number of factors – including when you start receiving payments, the number of years you have worked, and the amount of money subject to payroll taxes that you have earned each year during your career. Social Security is designed to replace roughly 40% of the income you earned pre-retirement.

You have the option to begin collecting Social Security benefits as early as age 62. There are pros and cons to claiming Social Security benefits before reaching full retirement age, or FRA. If you begin collecting payments when you are younger than your full retirement age, you may receive benefits for a longer period of time, but your payments will be lower. On the other hand, if you opt to start collecting payments when you are older than your full retirement age, your payments will be higher, but you may receive them for a shorter period.

Please visit the Social Security Administration websiteOpens overlay to review your annual reported income and work credits. You can also visit the Social Security Administration website to view more information on earnings that qualify, spousal benefits, and disability benefits.

How Social Security benefits are calculated

The Social Security Administration calculates benefits by using your 35 highest-paid years of employment. Your wages are indexed to account for inflation. Then, your average indexed monthly earnings, or AIME, is calculated by dividing your indexed wages by the number of months you worked – 420 months if you worked for 35 years or more. The maximum monthly Social Security payments you can receive, if you reached the maximum taxable earnings set by the Social Security Administration for at least 35 years, as of 2025 are as follows:

What is full retirement age?

Full retirement age is the age at which you qualify to receive 100% of your Social Security benefits. What qualifies as full retirement age depends on your birth year. As of January 2025, this is how the Social Security Administration defines full retirement age:

When should you start claiming Social Security benefits?

There are several important factors to consider as you plan for your retirement and make a decision about when you want to begin receiving Social Security benefits. Please note your social security amount reaches its maximum benefit if you choose to file at age 70; there is generally no financial benefit to waiting to take social security after 70 years old.

If you plan to continue working until after you reach full retirement age, you may want to wait to start receiving benefits so that your payments will be higher. Remember that staying in the workforce after you reach full retirement age does not mean your benefits will be reduced. If you plan to retire in your early 60s, you might be better off receiving payments earlier to cover your expenses, even though these payments will be lower.

Think about your health and your family’s health history. If you expect to live for a significant period of time after you retire, it could be helpful for your long-term financial stability to receive higher payments starting later in life. However, if you are concerned about your health at 62, it may make the most sense to start receiving payments sooner, even if it means they will be lower.

Each person’s situation is different when it comes to making a decision about when to begin collecting benefits. It can be helpful to discuss your options with trusted family members and friends, as well as with a financial advisor.

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