Understanding Social Security Benefits for High-Income Individuals

How Big Would Your Social Security Benefit Be If You Earned $1 Million a Year?

Earning a huge salary doesn't mean you're necessarily going to get a gigantic Social Security benefit. Find out why monthly retirement checks may not be that high for millionaires. In the United States, pretty much every worker pays into Social Security. This includes very high earners. And everyone who paid into the program gets retirement benefits, even if they are really rich and don't need the money. It's not a means-tested benefit limited to those with low earnings.

Social Security benefits are based on a percentage of income earned throughout the 35 highest-earning years in your career.

• Those who make more money get bigger benefits checks.
• The specific amount is based on how much money was made over the relevant 35 years, as well as when benefits were claimed.

So what if someone were making $1 million a year -- a hefty sum that would make them one of the top earners in the country? How much would their retirement check be?

This is how much millionaire workers get from Social Security

• An income of $1 million a year amounts to a monthly payment of about $83,333.33.
• Retirement benefits are generally designed to replace about 40% of pre-retirement income.

In 2024, the most a person who earned $1 million throughout their career could receive in benefits is $4,873. And that's only if they claimed their first retirement payment at age 70.

Why do millionaires get such a small Social Security benefit relative to earnings?

So why don't millionaires get bigger Social Security benefits? The reason is simple. High earners don't pay Social Security taxes on all their income, and only a portion of their income is considered as part of their wages when benefits are calculated.

Each year, the Social Security Administration establishes something called the 'wage base limit.' In 2024, the wage base limit is $168,600. The amount adjusts due to wage growth over time.

While millionaires get more Social Security than those who earned far less, it's not as much more as you might think. And the truth is that the maximum monthly Social Security benefit is not ever going to replace enough of your income to allow you to live the lifestyle you are accustomed to no matter how much you make.

So whether you're a millionaire or earn far less, it's up to you to save and invest throughout your career so you can have security as a senior.