Retirees can receive a check of up to $4,873 from Social Security, but in 2024, the payment to a retiree can’t be higher than that. Here’s why.
Did you know that millionaires and billionaires receive the same level of benefits as people who earn a fraction of their income? At some point, your benefits simply can’t go any higher, no matter how much money you make.
Here’s when it’ll happen in 2024—plus some details about why it’s happening.
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If you maximize your Social Security check
No matter how much money you’ve made over the course of your career and what age you retire, you won’t be able to get a Social Security check for $4,873 a month in 2024.
There is a reason for this. To understand this, you need to know how the Social Security benefits formula works. More specifically:
- Retirees receive a standard insurance benefit or a primary insurance amount (PIA).
- PIA is based on earnings during the 35 years of your career when you earn the most, after wages have been adjusted for inflation over your entire working life.
- You will receive the highest possible PIA if you earn the maximum taxable income for all 35 years that count towards calculating your benefits.
- If you begin taking your benefits at age 70, you can increase the maximum PIA amount by earning deferred retirement credits.
The key here is that you taxable income to qualify for the highest benefit. However, not all income is taxable. The fact that not every dollar is subject to Social Security tax explains why Social Security checks in 2024 can’t be higher than $4,873.
Most people pay Social Security on all their income, so all their income counts when calculating their primary insurance amount. Your benefits ultimately amount to about 40% of your income. However, Social Security has something called a wage ceiling. This limits or caps the wages that are taxed each year – and therefore limits the wages that are taken into account when calculating benefits and the benefits available.
In 2024, anyone who has earned the maximum taxable income for 35 years and waited until age 70 to claim their benefits will receive a benefit of $4,873. Anyone who hasn’t will receive less. No one can receive more.
The path to the highest possible social security check
To get the maximum benefit, you must earn the inflation-adjusted equivalent of $168,600 for at least 35 years. The $168,600 is the wage base limit for 2024, but it changes over time to account for wage growth. Next year it will likely be higher. Last year it was $160,200.
You can work longer if you want and earn more if you want, but you can’t make your check bigger by doing so. On the other hand, you can’t get the largest check available if you don’t reach the maximum taxable income in any of the 35 years considered in your benefit formula. The same is true if you file for benefits even one month before age 70, because then you’ve missed the chance to increase your benefits through delayed retirement credits.
Very few retirees receive $4,873 per month because these tasks are difficult to manage. You can find an estimate of your own benefits at mySocialSecurity.gov. You should do this so you can get a clear picture of what your benefits will do for you before you apply for them. This will help you decide how much supplemental income you need, because chances are your Social Security check will be much smaller and not enough to support a comfortable life in your later years.
