Hi,

I recently applied to start receiving my social security retirement benefits at age 70. Per My Social Secrity Account maintained by SSA, I earned the social security maximum taxable income in 40 of the years I worked (and paid the maximum SS taxes) yet the notice of award I received from SSA states my monthly benefit before Medicare premium deductions will be $3,798.50, not the maximum $3,895 I assumed I was qualified to receive. Can you help me understand why I did not receive the maximum benfit?

Thanks much for your help!

Hi. Simply put, there is no such thing as a "maximum Social Security benefit amount". Social Security retirement benefits are based on an average of a person's highest 35 years of Social Security covered wage-indexed earnings, and the indexing factors used to calculate a person's benefit rate are different for each calendar year of birth. So, when you read something about a maximum benefit rate, they are likely referring to the maximum possible amount that someone with a particular year of birth could receive at a given point in time.

Furthermore, the maximum benefit rate for each calendar year of birth changes after every year. If a person continues to work and pay into Social Security, they can keep increasing their benefit rate indefinitely. Therefore, there really is no maximum benefit rate, there is only a maximum amount that each person could possibly be paid in a given year based on their year of birth, their earnings history, and when they started drawing their benefits.

I don't know what source you're quoting when you refer to a maximum benefit amount, but if you've a) paid Social Security taxes on the the maximum amount of earnings subject to Social Security taxes in each of the last 35 years and b) if you waited until age 70 to start drawing your benefits and c) if Social Security has all of your earnings correctly credited including last year, then you should be eligible for the highest possible monthly benefit rate that a person born in the same calendar year as you could currently receive.

Best, Jerry