The maximum monthly Social Security retirement amount payable in a year generates a lot of interest. Here is the 2016 amount.
To be clear, this will be the maximum amount payable to a person retiring exactly at full retirement age (FRA) in 2016.
This is not the same as the highest possible Social Security retirement amount.
Full retirement age is 66 for people born in 1943 – 1954. When retirement benefits are started before FRA, the FRA amount is reduced by the number of months involved. When retiring after FRA, benefits increase by the number of months involved.
The maximum monthly Social Security retirement amount changes each year. Several reasons are responsible for this including national average wage information and having another year of potentially higher earnings available when computing retirement benefit amounts.
An early step in determining a retirement amount is to compute the person’s amount at full retirement age, without reductions or increases. Social Security uses the person’s best 35 years of earnings, weighted for inflation to do this.
Then, to compute the amount for the person’s actual retirement date, Social Security adjusts the full retirement age amount by the number of months that the person is away from FRA. When retirement benefits are started before FRA, the amount is reduced. When retiring after FRA, the amount is increased. More about these increases, called delayed retirement credits, is here.
So, what is the maximum 2016 Social Security retirement amount?
If starting Social Security retirement in 2016 exactly with the month of reaching full retirement age, and if the person earned at least the maximum SSA taxable earnings in each of the 35 years used in the calculation, then the highest 2016 Social Security retirement amount is $2,639 per month.
The estimated average SSA retirement amount for all workers as of January 2016 is $1,341 per month.
Knowing the highest 2016 Social Security retirement amount is interesting. In my opinion, estimating your personal retirement amount is more useful. Do so by using the SSA Retirement Planner. Information and calculators are there for you.
The Retirement Estimator is very good because it uses your actual Social Security earnings record. Automatic estimates are shown for age 62, your full retirement age, and age 70. You can adjust these for different ages or different future earnings.
To adjust your estimate by the number of months that you are away from FRA, go to the calculator page for the “Early or Late Calculator. Early means starting before FRA, late is starting retirement after it. When using it, note that the term primary insurance amount is the same as amount at full retirement age, and normal retirement age is the same as FRA.
Want to see the earnings on your Social Security record? You should since your retirement is based on them. Create a personal my Social Security account and view your online Social Security Statement. The Statement provides your earnings record with family estimates for SSA retirement, survivors and disability benefits.
Ready to file for your Social Security retirement? Go online.
