Max Social Security Benefits in 2026 | Episode 6

In this video Kolin Hayes talks about the maximum social security benefit someone can earn in 2026. He looks at the social security wage base in 2026 of $184,500 and how that has increased each year. Kolin talks about the cost of living adjustment (COLA) in 2026 of 2.8% and how that affects the maximum benefit someone can earn from social security. 

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Transcript

SPEAKER_00 0:00

So, you might be wondering what is the max benefit that someone could be receiving from Social Security in 2026 and how did they get there? Well, it's not as simple as just one number because if you've seen any of my videos in the past or anything about Social Security, when you claim Social Security, there are different reductions or increases in your benefit. So in 2026, this is information directly off of Social Security's website. The most that someone could be receiving from Social Security benefit if they were to claim at 62 years old, it is about $2,969 per month. At full retirement age is $4,152 per month. And if you wait until age 70, the most that somebody could be receiving from Social Security in 2026 is about $5,181 a month. Now you might hear these numbers. Wow, over $5,000 a month if you waited until $70. Then you go look at your statement, and it's nowhere near $5,000 a month at age 70. Or it's nowhere near $4,152 per month if you wait until full retirement age. Why is that so much higher and why is your number maybe lower than that? See in 2026, the average Social Security monthly payment on average is $2,071. That is a far cry away from $4,000, even $5,000. So why is maybe your estimate lower than what the max benefit is? But also why is the average benefit way lower than what the max benefit is for 2026? To hit this max number, you would have had to earn at or above the Social Security taxable wage base for the last 35 years. And in 2026, that number is $184,500. So if you make more than that number, then no Social Security tax is actually being withheld above that number. But to earn the max benefit, you had to have been making at or above putting the most money into Social Security over your working career. And yes, 20 years ago, 30 years ago, that number was not $184,500. It's actually been lower, a lot lower, and that number does slowly increase, usually year over year. But to earn this max benefit, you'd have to have been earning a high income for a long time. And each year, the average, the max benefit usually gets higher. Because what comes with Social Security is a cost of living adjustment. And usually, each year, that cost of living adjustment, or also known as COLA, C O L A, usually occurs. Not always, but it usually occurs. So every single year that you have Social Security, and if there is a cola cost of living adjustment, your benefit will increase. In 2026, that cost of a living adjustment was 2.8%. So when you see a higher maximum benefit each year or your benefit increase year over year, it is due to that cost of living adjustment. It's not always 2.8%, sometimes it's more, sometimes it's less, but that cost of living adjustment is factored into social security. So it's really interesting to see what the max benefit is for Social Security, what your benefit is for Social Security. But really what matters is always with Social Security is the timing of when you claim it. If you take it early before full retirement age, your benefit is reduced permanently. If you take it after full retirement age up until age 70, it is increased permanently. So the timing of when you claim Social Security is important. Are you taking it early? There's reasons why you would do that. Are you taking it at full retirement age? There's reasons why you would do that. Are you taking it at age 70 or delaying it sometime past full retirement age? There's reasons as to why you would do that. So it's fun to look at the max benefit, but really what's more important is not how do I maximize my social security. The real question is, what is the best time, the most optimal time for me to claim social security based on my income, based on my retirement accounts, based on my taxes, and really based on my overall financial plan. And that's important because claiming Social Security is not just a vacuum of one decision. It's how does this one decision fit in my overall plan? How does this one piece fit in my overall puzzle? That overall puzzle being my financial plan. So if you are within five to ten years until retirement, these are the decisions, these are the things that you should be thinking about. If you found this video helpful, please be sure to hit that subscribe button. Thank you so much for watching, and I'll see you in the next one. The opinions voiced in this podcast are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision.