Want the Max $5,108 Social Security Benefit? Here's the Salary You Need

Needless to say, Social Security is a large, complex program with over 74 million Americans receiving benefits each month. Social Security retirees can claim benefits at different ages, and the amount of benefits they will receive varies greatly depending on key factors, including the number of years they worked, how much they earned over their career, and when they specifically decide to claim benefits.

The maximum monthly Social Security check is currently $5,108, or $61,296 annually. Here's the salary you need to claim the max benefit.

Work long and make a lot of money

Since the Social Security Administration (SSA) uses a formula to calculate benefits, retirees will want to understand the main inputs of this formula if they want to claim the max benefit, or more realistically, the highest amount they can get when they near retirement.

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The first big input is the number of years worked -- specifically how many years one paid Social Security taxes from their earnings. To calculate the average indexed monthly earnings (AIME), the SSA looks at a person's highest 35 years of earnings, so to obtain the maximum benefit, they should have at least 35 years of work history. When people don't work for 35 years, the SSA fills in any missing years with a zero, which significantly hurts the AIME.

Another critical part of the calculation, which also happens to be the most difficult to influence, is how much money workers have made in each of those 35 years. To receive the maximum benefit amount, workers have to pay the maximum amount of payroll taxes. Social Security payroll taxes are 6.2% each for employees and employers, or 12.4% for self-employed workers.

However, the SSA can only tax a certain amount of a person's earnings, which changes each year based on how much wages increase. This number is referred to as the benefit base. Here is the benefit base for the past five years:

• 2021: $142,800
• 2022: $147,000
• 2023: $160,200
• 2024: $168,600
• 2025: $176,100

Not only can the benefit base rise significantly in some years, but it also tends to be a high salary that the vast majority of Americans don't make.

The final factor that impacts a retiree's benefits is the age at which they claim benefits. Retirees can claim benefits as soon as age 62 and as late as age 70. However, there is a trade-off. The SSA calculates each person's baseline benefit based on their full retirement age (FRA), which is 67 for those born in 1960 or later. Those who claim before FRA will see a small reduction to their benefit for each month they claim early, calculated as a percentage of the baseline amount.

Meanwhile, those who wait until after FRA to claim will see their benefits increase a small percentage each month. As a result, claiming benefits at age 62 can lower a retiree's benefits by as much as 30%, while waiting until 70 can increase benefits 24%. To get the maximum benefit, one would have to wait until age 70 to claim.

The max benefit is a fantasy

Due to the difficulty of earning the benefit base or more each year, achieving the max $5,108 monthly Social Security benefit is a fantasy for most retirees. In fact, according to the SSA, only about 6% of people now earn the equivalent of the benefit base each year. The percentage of people consistently earning the benefit base for over three decades will be tiny by comparison.

The other reality is that not everyone can wait until age 70 to claim Social Security. There is no "right" age to claim Social Security -- the choice really depends on a retiree's individual situation. If someone is dealing with health issues and needs retirement funds at 62 to cover their daily expenses, then it makes sense to claim benefits early. If someone is financially comfortable or perhaps still working, then it makes sense to delay.

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