Here’s Exactly How To Improve Your $4,194 Monthly Social Security Max | Smart Change: Personal Finance
You often hear that retiring on Social Security alone can mean getting rid of major financial hardship. But that assumes you don’t get the maximum monthly benefit of $4,194.
If this is how much you are entitled to, then Social Security may provide you with an annual income of more than $50,000. And if you are the type who knows how to live frugally, you may get a good income like that.
But most seniors aren’t actually able to claim their $4,194 monthly Social Security benefits — not even close to them. And if getting maximum monthly interest is a goal for you, you’ll want to stick to it long before you retire — and hopefully, the stars are in your favour.
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It is not easy to qualify for maximum Social Security benefits
There are three specific things you will need to do to claim your maximum Social Security benefit:
- Work at least 35 years
- Earn a salary high enough to hit the maximum annual Social Security wages for 35 years
- File Social Security at age 70
Some of these things are easier to do than others. If your health cooperates, you may be able to put a full 35 years into the workforce. This is true even if you end up taking time off for a few years, whether to raise children or for some other reason.
Likewise, as long as you end up in a position where you can work up to the age of 70 or tap into other sources of income, delaying enrollment to that point may be possible. And claiming benefits at age 70 means securing the highest monthly Social Security payday you’re eligible for (assuming you claim a benefit based on your own earnings history).
But it is the middle step that is difficult to achieve well. You can work hard, put in extra hours, and strive to be the best employee your company has ever seen. But if you’re not in a particularly lucrative field, you may struggle to earn enough to meet the annual maximum Social Security wage.
Each year, a maximum wage is established that determines how much income is taxable for social security purposes and how much income counts for calculating a future Social Security benefit. This year, the maximum wage is $147,000. Last year, it was a little lower, and next year, it will probably go up.
Earning the equivalent of the maximum annual wage may not be possible if your career is not conducive to really high wages. So, even if you commit to working for the full 35 years and also delay your filing until age 70, you may end up falling short of your maximum monthly benefit.
However, this should not be a source of stress or frustration for you. Most seniors don’t get nearly $4,194 a month from Social Security. And if you do your part to build a solid nest egg, you may do well in retirement with a monthly interest of half that size.
Likewise, if you are able to carefully budget and prioritize the things you brag about as a retiree, you may find that you are able to earn less than expected. Instead of worrying about setting yourself up for maximum monthly Social Security benefits, you may instead want to devise a savings strategy and figure out a way to live comfortably as a senior without spending a fortune.
The $18,984 Social Security Bonus Most Retirees Totally Forgot
If you’re like most Americans, you’re behind on retirement savings for a few years (or more). But a few little-known “Social Security secrets” can help ensure a higher retirement income. For example: One easy trick can pay you up to $18,984 extra…every year! Once you learn how to maximize your Social Security benefits, we believe you can retire with confidence with the peace of mind we all seek. Simply click here to discover how to learn more about these strategies.
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