Just about every American hopes to get financial support from Social Security at some point in their lives. With a formula based on average income over your career, the insurance calculates how much you will be eligible to receive if you claim benefits at different ages. Because this formula takes into account a limited amount of revenue in its calculations, there is a theoretical maximum amount for Social Security benefits that recipients can receive each month.
The maximum social security benefit changes from year to year, based on factors such as inflation and changes in the income amount taking into account payroll tax on social security. The Social Security Administration just released the new maximum benefit for 2020, and the numbers are somewhat surprising with how much they differ depending on the age at which you claim benefits.
Let's look at how we can calculate maximum benefit and why there were so many differences.
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How to Get Maximum Social Security Benefit
If you want to receive the most you can from Social Security, you must have an extremely successful career. By making their calculations of the maximum benefit, SSA assumes that an employee has earned the maximum salary base each year since the age of 22, giving them full benefit of a work history of 35 years or more.
SSA calculates the maximum amount for claimants of four different ages: 62, 65, 66 and 70. Those born in 1
Here you can see the figures for those leaving in 2020, together with recent years.
|
Retired year |
Maximum at age 62 |
Maximum at age 65 |
Maximum at age 66 |
Maximum at age 70 |
||||
|---|---|---|---|---|---|---|---|---|
|
2017 |
$ 2,153 |
$ 2542 |
$ 2687 |
$ 3538 |
||||
|
2018 |
$ 2158 |
$ 2589 |
$ 2788 |
$ 3698 |
||||
|
2019 |
$ 2209 |
$ 2757 |
$ 2861 |
$ 3770 [19659020] 2020 |
$ 2,265 |
$ 2,857 |
$ 3,011 |
$ 3,790 |
Data Source: SSA. The figures are the actual monthly payment in the specified pension year.
The most interesting thing about this chart is that the numbers do not increase by the same amount each year for those of different ages. For example, for those who passed away at age 62, the increase in 2018 was quite small, but the increase since then has been greater. For those who retired at the age of 70, the increase in 2018 was greater than the 2019 and 2020 increase together. A maximum of 66 years climbs $ 150 in 2020, compared to just a $ 20 increase for a maximum of 70 years.
There are several reasons for these differences:
- Full retirement age is about to go from 66 to 67, and because it is based on the year you were born, the younger creditors on the chart have higher full retirement age than the older ones Claimants do.
- The pay bases that people of different ages have experienced during their careers are different, which gives an advantage to some over others.
- Differences in formula inflection points that control people of different ages can also produce different amounts of benefits.
Get as much as you can
The other weird thing is that some older recipients who have claimed previous years are calculated to get more than the maximum amounts for new pensioners next year. Those who claimed the age of 70 in 2018 and 2019 and qualified for maximum benefit in those years will receive $ 3,862 and $ 3,830 per month, respectively, in 2020. That's because COLAs have taken what were originally lower maximum benefits and the promise them above the number for pensioners by 2020.
Few people receive the maximum social security benefit because you will have an extremely high income throughout your career. However, the best things you can do to maximize the size of your social security check are to work for at least 35 years and wait as long as you can before claiming retirement benefits. The more money you earn, the closer you will be to maximizing social security.
