Want the maximum $4,873 Social Security benefit? Here is the salary you need.

Social Security is not designed to fully replace the average worker’s income. The average retired worker benefit was $1,919.40 in July. That’s not enough to cover the basics for most retirees, who face rising housing and medical expenses each month.

If you earn enough during your career, you could receive much more from Social Security when you retire. The maximum retirement benefit this year is $4,873 per month or $58,476 annually. That’s about the same as the median income in the United States. And that amount will increase over time due to annual cost-of-living adjustments.

The requirements to receive that maximum benefit are simple, but certainly not easy to achieve. Only a small percentage of Americans will qualify. Here’s how you can become one.

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The three factors that determine your pension

There are three factors that determine how much you will receive in Social Security retirement benefits:

• Your earnings history
• when you were born
• When you retire

Your earnings history has the biggest impact on your Social Security benefit. You must consistently earn a high salary to qualify for even the maximum potential benefit. That’s because the Social Security Administration (SSA) looks at your entire career, adjusts annual earnings for inflation, and then selects the 35 years with the highest earnings. The average of those 35 years is the basis for calculating your benefit.

The SSA takes your average earnings and plugs that number into the benefit formula (which is based in part on the year you were born) to determine your primary insurance, or PIA, amount. This is the amount you will receive if you apply for benefits at full retirement age.

That age is determined by the year you were born. Those born between 1943 and 1954 reached full retirement age at 66. The age increases by two months for each year you were born after 1954, before reaching 67 for those born in 1960 or later.

The last factor to consider is when you claim benefits. You can apply from age 62, but if you do so before you reach full retirement age, you will receive less than PIA.

You can also wait to claim benefits after full retirement age, and if so, the government will increase your benefit for each month you delay until age 70. For example, those with a full retirement age of 66 could get a 32% boost to their PIA by waiting until 70 to claim (waiting past 70 won’t increase your benefit further).

Maximizing Earnings History

There is another important detail about your earnings history that affects your Social Security benefit. The SSA limits your annual earnings during your career to determine how much you pay in Social Security tax at a rate of 12.8% (half from employees and half from employers).

Because you’re not taxed on anything above that amount, the SSA doesn’t count it in your earnings history either. This effectively sets the bar for the salary you need to receive the maximum Social Security benefit in retirement.

The SSA updates the maximum taxable earnings limit each year to adjust it for wage inflation. The following table shows the limits for the last 50 years. If your earnings have exceeded these limits for at least 35 years, you will be eligible to receive the maximum pension benefit.

Data source: Social Security Administration.

If you’re still working, it’s important to remember that earnings limits will continue to rise over time due to inflation. So if your salary doesn’t keep up with the earnings limits for at least 35 years, you won’t qualify for the maximum possible retirement benefit.

It’s more than just earning a big salary

As mentioned, there are several other factors that go into calculating your monthly Social Security check.

First is when you were born. The maximum monthly benefit of $4,873 in 2024 is only applicable to retirees who turn 70 this year. This is due to small changes to the benefit formula affected by when you were born.

The second is when you claim. You need to wait until at least age 70 if you want to maximize your potential monthly benefit.

If you’re in line for the maximum possible Social Security benefit, it means you’ve earned a relatively high salary for at least 35 years. And if so, you might be used to a lifestyle that requires more than $4,873 a month. Additionally, you may not want to wait until age 70 to retire. As such, it is important to also save independently for retirement.

Regardless of your earnings history, building up your personal savings so that you rely solely on Social Security for supplemental income is the best way to ensure that you can retire on your own terms and live the life you want in your years gold coins The maximum benefit, if you qualify, could just be the icing on the cake.