Most people will not receive a maximum of $4,194 in Social Security benefits. Why does it matter | Smart Change: Personal Finance

(Katie Brockman)

Social Security benefits are a lifeline for many retirees, so ensuring that you get as much as possible makes sense.

The average retiree collects about $1,657 a month in benefits, according to the Social Security Administration, but the maximum you can receive in 2022 is $4,194 a month.

While the goal of maximizing the benefit is not a bad idea, it is unrealistic for most people. You’ll need to meet several requirements to maximize benefits, some of which are exceptionally hard to come by.

But the good news is that it doesn’t matter whether or not you can reach the maximum benefit amount. No matter how much you earn, there are easier ways to increase your earnings social Security.

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What does it take to reach the maximum benefit amount?

There are three main requirements for earning the maximum amount of Social Security benefits: working for at least 35 years, delaying benefits, and consistently reaching the maximum taxable earnings.

  1. Work at least 35 years old: The Social Security Administration calculates your benefits by taking your average earnings over 35 years from the highest earnings in your career. To earn the maximum benefit amount, you must have worked for the full 35 years before applying.
  2. Benefits of delaying: You can apply for benefits as early as age 62, but to get as much as possible each month, you have to wait until age 70 to start claiming.
  3. Reaching the maximum taxable profit: This is the maximum income subject to Social Security taxes. This limit fluctuates every year to account for inflation, but in 2022, it was $147,000 per year. To earn the maximum benefit amount, you must have reached these limits consistently throughout your career.

If you are unable to meet all three of these requirements, you are not alone. The majority of Americans will not be able to reach the maximum amount of benefits, and that’s okay. Fortunately, there are still many ways to increase the benefits you get.

How to increase your Social Security

To earn as many checks as possible, you will need to work for at least 35 years, delay benefits until age 70, and ensure that you earn at least $147,000 annually. But if you can’t hit all three of those criteria, getting as close as possible will result in a bigger batch each month.

For example, you probably can’t earn enough to reach your maximum taxable earnings, but you can Benefits of delaying until age 70. This alone can increase your payments by hundreds of dollars per month.

Or maybe you don’t want to delay Social Security until age 70, but you can wait until age 65 to start claiming. This will also result in larger payments compared to if you had applied at age 62.

Some people may not be able to delay benefits at all, and that’s okay too. If you can slightly increase your income (even if you’re not close to the $147,000 per year cap) or work a few more years (even if you haven’t worked for the full 35 years), these actions can still increase your benefits.

Small steps can make a big difference

The highlight here is that even small actions to increase your benefits can pay off big in the future. So, even if you are not on track to earn the maximum amount of benefits, this does not mean that you can still increase your payments as much as possible.

The $18,984 Social Security bonus is totally overlooked by most retirees

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