The Social Security administration states that the maximum monthly Social Security retirement payment for an individual beginning benefits in 2024 is $4,873. Workers who want to postpone receiving Social Security benefits till they turn 70 in 2024 and have accrued 35 years of maximum income covered by the program will get this sum. The maximum amount for those over 70 has been raised significantly from the $4,559 monthly amount in 2023.
Social Security Benefits; Source- CNN
Social Security Benefits Calculation
Let’s say you reach your FRA in 2024 and choose to begin receiving Social Security payments, rather than waiting to turn 70 years old. $3,822 would be your monthly retirement benefit. Once more, this is if you worked 35 years at the highest salary eligible for Social Security benefits. At your full retirement age (FRA), your main insurance amount (PIA) is determined by Social Security using a complicated benefit calculation. Your monthly pension benefit will be the same as your PIA if you truly begin receiving pension income at your FRA.
The average percentage of your salary covered by Social Security during a 35-year period is one of the inputs used in the benefit formula. Your average indexed monthly earnings (AIME) are the average of these amounts. Your PIA and revenue will increase in proportion to your AIME. The Social Security Wage Base is the annual maximum quantity of your earnings that is applied to your AIME (SSDWB). It is increasing annually and will come to $168,600 in 2024. Additionally, the SSWB is the highest sum subject to Social Security taxes. In the event that your covered earnings span more than 35 years, the earnings with the highest average are selected using the AIME computation.
AIME Computation
The AIME calculation will add zero earnings for each year under 35 where you did not have profits if you covered earnings for less than 35 years. If you were born in a year between 1943 and 1954, your full retirement age (FRA) is 66. For those born in 1960 and later, it rises by two months for every birth year after that, until it reaches age 67. The amount of your monthly benefit is also determined by the age at which you begin receiving Social Security retirement income. Your monthly payment will be equal to your PIA less a % for every single month the benefit begins before your FRA if you retire earlier your FRA and start receiving benefits.
Increasing Social Security Payments
Most people find that delaying the start of benefits till age 70 will maximize their ability to do this and earn the most postponed retirement credits. Next, review your AIME calculation. A prerequisite for optimizing your Social Security income is to achieve a minimum of the SSWB annually for a period of 35 years. You should put in a few extra years of work if your covered earnings span fewer than 35 years in order to remove any years where your AIME is calculated with zero wages. By earning a few additional years at a higher covered wage, you can also improve your AIME if you have over 35 years of covered income but some of those years were low.
