3 steps to claim a monthly social security benefit of a maximum of $4,194 | personal financing
Here’s some bad news: The average Social Security retirement benefit recently was just $1,669, or about $20,000 a year. The fact that this is an average means that many people receive less – and sometimes Many Less than that. On the other hand, those with above average earnings history will collect more than $1,669 – the maximum people receive these days is $4,194, which comes out to about $50,000.
Here’s what you need to do to get the $4,194 per month maximum Social Security. There’s a good chance you can’t quite get there, but you may still be able to increase your bottom line benefits quite a bit – maybe even by 24% or more!
1. Earning income for at least 35 years
To understand how to qualify for this maximum benefit, know that for each of us, our benefits are calculated based on our earnings in the 35 years in which we have generated the most profits (adjusted for inflation). So you’ll need to have worked for at least 35 years to stand a chance of making $4,194 a month.
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2. Earn the maximum that matters
In addition to working for 35 years (at least), you will also need to have the maximum allowed in each of those years. The cap is probably lower than you think: For each year, there is a cap on taxable earnings — a level of income beyond which you are not subject to Social Security tax. That limit is $147,000 for 2022, and it tends to increase each year.
So to qualify for this maximum payment, you’ll need to earn at least $147,000 in 2022 – and at least the corresponding amount for each of the other 34 years. You’ll likely have already had at least one year of earnings below the maximum taxable earnings — but that alone doesn’t necessarily disqualify you. Know that for every year over the 35 years you work, your lowest-earning year will be fired, leaving only the 35 years in which you earned the most.
3. Delaying the start of collecting your benefits
Finally, you will also have to delay the start of collecting your benefits until age 70. We each have a “full retirement age” at which we can start collecting the full benefits we are entitled to based on our earnings history. For most of us, it’s 66 or 67 years old. You can start collecting at 62, though, which means your benefits will be reduced (but you’ll get more checks overall).
Or, if you delay starting to collect after your full retirement age, your benefits will increase by about 8% for each year you do so, until age 70.
So, to get the most benefit, you would have to earn the maximum taxable earnings for at least 35 years, and then delay starting to collect benefits until age 70. This obviously won’t happen to most of us.
Take heart though – because there are still ways to increase your Social Security benefits in the future.
work on collection for you maximum benefit
Even if it looks like you’ll only collect $2,000 a month in Social Security benefits when you retire, the strategies above can help you increase that amount.
For starters, if you can earn more in the coming years, such as getting a promotion, changing into a higher paying job, and/or taking on some side jobs, your benefits can increase. Also, if you’re earning more these days than you earned in the past (based on inflation), then if you can work, say, 38-40 years, you’d start with three to five years of low income.
Delaying interest collection until age 70 — if you can wait that long — will also boost your paycheck a lot, perhaps up to 24%, if you’re late from 67 to 70.
So while $4,194 may be out of reach, you may be able to add hundreds of dollars to your monthly winnings — which can make a meaningful difference in the future.
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