Personal Finance

I Ran the Math and Found That Social Security Can Be Worth as Much as $1.5 Million

Maurie Backman

Published: February 3, 2025 9:11 am

Social Security provides crucial benefits to millions of retirees today. And while you’ll often hear that those benefits aren’t so generous, the reality is that some seniors get a pretty nice paycheck out of Social Security each month.

Recently, a Reddit poster found themselves wondering what sort of lifetime payout Social Security might provide. And by their calculations, it seems that those benefits could amount to $1.5 million in someone’s lifetime.

But are their numbers correct? Let’s find out.

A large payday is possible — under the right circumstances

This year, the maximum monthly Social Security benefit is $5,108. That benefit is available to people who were high earners throughout their careers and who delayed their Social Security claims all the way to age 70.

Meanwhile, $5,108 multiplied by 12 comes to an annual Social Security benefit of $61,296. And when we multiply that by 25, it brings us to $1.532 million.

So what this tells us is that yes, it’s possible for Social Security to pay someone $1.5 million in their lifetime since, conceivably, someone could claim the maximum monthly benefit at age 70 and live until 95 (or beyond). But it’s also important to realize that the typical retiree does not get the maximum monthly benefit — not even close.

Also, this calculation does not account for potential Social Security cuts. Social Security is facing a funding shortfall that could force the program to broadly reduce benefits by about 20% in just a decade’s time. If those cuts end up happening, a lifetime $1.5 million Social Security payout may be out of reach even for people who are eligible for the maximum monthly benefit and live a long life.

Don’t plan to retire on Social Security alone

It may be that you earn a nice salary and are expecting to delay your Social Security claim until age 70 for the highest monthly benefit you can get. Even so, it’s best not to plan to retire on Social Security alone.

One thing you have to keep in context is that Social Security will only replace about 40% of your pre-retirement wages if you’re an average earner. And if you’re even contemplating a $1.5 million lifetime payout from Social Security, it means you’re not an average earner — you’re an above-average earner. This means you may be looking at much less replacement income from your monthly benefits once you claim them.

It’s common for people to reduce their spending in retirement. But do you really want to reduce yours by 60% or more? If not, then you’ll need income outside of Social Security during your senior years.

However, if you’re in a position where you think you might eventually qualify for Social Security’s maximum monthly benefit, it means you probably earn enough to steadily fund an IRA, 401(k), or savings plan of your choice. And if you do that consistently through the years, you may find that you have plenty of income available to you once you retire — even if Social Security doesn’t end up paying you $1.5 million.

Of course, if you want to approach your retirement finances with more confidence, it’s a good idea to consult a financial advisor. They can help run projections that show you how much retirement income you may be looking at based on not just Social Security, but your entire financial picture.