Social Security will get an 8.7% cost-of-living adjustment (COLA) in 2023 due to 2022's high inflation, so retirees across the board can expect noteworthy increases in their monthly benefits. That includes even those former high-earners who now receive the largest possible Social Security benefit, which is expected to rise from $4,194 per month in 2022 to $4,555 per month next year.
That would be a tidy sum. But qualifying for the maximum Social Security is pretty much a fantasy.
It's still really hard
In order to qualify for the maximum Social Security check, a person would need to do three things. The first is the easiest: You'd have to work for 35 years or more because of how the Social Security Administration calculates your benefits. It takes the 35 years during which you earned the most money on an inflation-adjusted basis and averages them together (again, compensating for inflation) to figure out your average yearly and monthly wages. The monthly figure is the one that your benefits will be based on.
But if you worked even one year less than 35 years, there will be at least one "zero" rolled into that calculation, which will drag your average wages down. That alone would stop you from qualifying for the maximum possible Social Security check. Still, plenty of people work for 35 years or more over the course of their careers.
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The second thing retirees hoping to get the maximum check will need to do is delay the date at which their start taking benefits until they turn 70. If you were born after 1960, your full retirement age -- the age at which you qualify for what the government views as your full Social Security benefit -- is 67.
The maximum monthly benefit check for someone claiming at full retirement age is only $3,568 this year, and will to rise to $3,808 next year. However, for each year you delay taking those benefits -- until you hit 70 -- your monthly check grows by 8%. Those "delayed retirement credits" are what would allow a person to reach that maximum monthly benefit of $4,555. Yet only about one in every 20 Social Security recipients waits until age 70 to claim.
The third thing you'd have to do is the hardest: You'd need to earn at least the maximum amount that is taxable under the payroll tax cap -- and not just for one year, but for 35 years.
The Social Security Administration largely funds its benefits through the federal payroll tax. But Congress has set a limit on the amount of your earnings that can be taxed for Social Security. This year, that cap -- also known as the wage base limit -- is $147,000. The limit grows to account for inflation and will rise to $160,200 in 2023. So, if you plan to claim Social Security at 70, you'll need to be earning more than the annual wage base limit by age 35 at the latest.
This makes achieving the maximum Social Security check quite difficult because it's hard to generate this amount of annual earnings for 35 years. The Social Security Administration has said that every year, about 6% of workers have earnings at or above the wage base limit. It can also be hard to keep up with the annual increases to the wage base limit. This year, wage growth has largely failed to keep up with inflation, and recent reports suggest that wage growth also started to slow earlier this year.
A lot has to go right
When you consider everything that you'd need to do to claim the maximum Social Security check, it really does seem like a fantasy. No, it's not impossible, and yes, some people do receive the largest possible monthly benefit, but those who do are likely to be quite well situated in retirement, and won't be as concerned about their Social Security benefits as most of us will be.
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