Most of a $70,000 Raise Won’t Count Toward Social Security Benefits
A hypothetical 61-year-old worker whose pay rises from $170,000 to $240,000 will have only $14,500 of that increase count toward Social Security benefits because the 2026 taxable maximum is $184,500. That extra credited income would add roughly $5 per month to future benefits, while wages above the cap are not subject to the 6.2% Social Security payroll tax. The article notes that workers aged 60 to 63 can contribute up to $35,750 to a 401(k) in 2026 as another way to grow the additional earnings.
For 2026, Social Security taxes and credits earnings only up to $184,500. A worker whose pay rises from $170,000 to $240,000 adds just $14,500 to his earnings record; the remaining $55,500 never enters the benefit formula. Since benefits rest on the 35 highest-earning years, that credit spreads across 420 months, raising average monthly earnings about $35 — roughly $5 more per month in the top bracket.
Above the cap, the 6.2% payroll tax stops for the year, saving about $3,441. Medicare withholding continues, plus an extra 0.9% above $200,000. Workers aged 60 to 63 can put up to $35,750 into a 401(k) in 2026.
High earners nearing retirement may find that large late-career raises do little for their Social Security checks, since only wages up to the annual cap are credited. This could push some workers to lean more heavily on 401(k) contributions and other savings vehicles instead. It may also widen the gap between what workers expect from Social Security and what they actually receive, though the payroll-tax savings above the cap could offset some of that disappointment.