Ask The Seniors Center: 2018 maximum benefits

I recently read the retirement benefits will max out at $2,788 as of 2018.  Is this true?

Eric Obermeit

Hi, Eric! Thanks for your question.

The maximum payable Social Security benefit for those retiring at full retirement age (FRA) did indeed jump to $2,788 this year–that’s an increase of over $100 per month for those able to claim the maximum payment.  Annually, this equals $33,456.

This jump is due to another change to Social Security for this year: the maximum taxable earnings cap raising from $127,200 to $128,700, bringing more money into the Trust Fund by applying the payroll tax to $1,500 more of the highest earners’ yearly income.

But $2,788 isn’t the maximum benefit possible.  This amount applies to those retiring at their FRA.  This number increases the longer you wait to retire.

To truly receive your absolute largest benefit, the magic retirement number is 70–as in age 70.

Each year you wait to retire until age 70 raises your benefit by a percentage.  By age 70, you will receive a 32% increase in your monthly benefit.

And then there’s the maximum allowable benefit.  The MAXIMUM maximum benefit.

If you file for retirement at 70 and your 35 highest earning years were at or over the taxable earnings cap, you’d be eligible for the maximum allowable benefit of $3,680–or $44,162 per year.  This is the TRUE maximum benefit permitted by Social Security.

Unfortunately, only a small minority of retirees will be able to hit that true maximum. Most people don’t earn even close to six figures, let alone for 35 years.  In 2017, the average American’s median income between ages 35 to 64 was around $50,000 per year.  The average Social Security benefit is $1,404.

And waiting until 70 to retiree just isn’t in the cards for many people.  Illness, disability, a death in the family, becoming a caregiver, and job loss are only a handful of the life events that can force someone to file early.

Here is a recent article by Forbes explaining the new maximum benefit for 2018 and how benefits are calculated.

Thanks again for your question, Eric!  Hope that helps!


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