The Social Security program has been existing as a pillar of financial support to tens of millions of individuals across the country for almost a century now. For the most part, the maximum amount that you will be able to claim from the Social Security Administration (SSA) upon retirement depends on your lifetime earnings. There are, however, some other factors that also play a role in your final benefit calculation and knowing what these are could have a massive impact on the final figure you see on your monthly checks.
In order to claim retirement benefits, you will need to make monthly contributions towards the dedicated Social Security payroll tax. The SSA limits how much of your income it considers for this contribution and in turn, it also has a maximum amount it will issue in benefits. The age at which you begin claiming could also mean the difference between a reduced benefit or an increased benefit. Here is a breakdown of how income and age impact retiree claims at the SSA.
How are Social Security benefits calculated?
When you are earning an income, 6.2% of your earnings will be contributed towards the Social Security payroll tax. Your employer will typically match this, bringing your total contribution up to 12.4%. Making these contributions will earn you “work credits”, and you can earn up to four work credits per year. In order to become eligible for Social Security upon retirement, you will need to have earned a minimum of 40 work credits.
This equates to at least 10 years of work, however, you benefit amount will likely be quite low since the benefit calculation takes into account 35 of your highest earning years. For this reason, it is recommended to have worked for a minimum of 35 years if you plan to claim Social Security in your retirement. If, for instance, a claimant has only worked for 28 years, there will be 7 years with a recorded income of $0 in their benefit calculation, which will bring their total down. The SSA also limits how much of your income it considers for these contributions and this is called the wage cap. The 2025 wage cap is $176,100, but this will be increased to $184,500 in 2026.
How does retirement age factor in?
The age at which you claim plays arguably the second most important role in your benefit calculation. Social Security can be claimed from age 62, however, this is considered an early claim and as a result, your benefits will be reduced. The reason for this reduction is the policy of the “full retirement age” or FRA. The FRA is the age at which you become eligible for 100% of your benefits and it is currently age 66-67. If you claim early, your benefits will be reduced by up to 30% depending on how many months remain between your current age and your respective FRA. It is also important to note that this reduction will be locked in and your benefits will not be recalculated once you reach FRA.
Alternatively, if you delay your claim until you are 70 which is past FRA, you will receive an 8% increase to your benefits for each year that you delay your claim. If someone with an FRA of 67, for instance, delays their claim until age 70, they will then become eligible for 124% of their benefit.
How to earn the maximum benefit?
In 2025, the maximum benefit issued by the SSA at FRA totals to $4,018, while the maximum benefit issued overall totals to $5,108 per month. In order to become eligible for this generous $5,108 benefit check, the beneficiary will need to have met all three of the following requirements:
- Worked for a minimum of 35 years
- Earned an income that is equivalent to or higher than the wage cap for each respective year of those 35 years
- Delay their retirement beyond FRA until age 70