Why some retirees wind up with a maximum Social Security benefit $1,830 lower than others

Each year, a cap on the pay base, or maximum taxable income, is established.

This cap was put in place to stop the Social Security Administration from giving extremely wealthy income monthly cheques totaling tens of thousands of dollars.

During the 35 years when retirees made the greatest money, the Social Security calculates payments based on average wages up to the wage base limit.

Therefore, the maximum Social Security payment is equivalent to a percentage of the highest countable income that each current retiree may have earned over a 35-year period.

The pay base ceiling is $147,000 in 2022. Every year, it is adjusted for inflation, but the amount of revenue is still very substantial.

Full retirement age (FRA) for retirees who are currently 66 or younger is between 66 and 4 months and 67, but benefits can be claimed at any time from 62 to 70.

The typical benefit for a retiree who applies for benefits at full retirement age is determined by their 35 highest-earning years.

Retirement benefits for retirees who file claims before FRA are reduced by early filing fees, while benefits for retirees who file claims after FRA are increased by delayed retirement credits up to age 70.