Social Security is often criticized for failing seniors in retirement. The reality is that many seniors wind up disappointed in their benefits because they expect too much out of Social Security in the first place. Those benefits are only designed to replace about 40% of the average earner's pre-retirement wages, and most seniors need a lot more money than that to live comfortably.
That said, the right strategy on your part could make it so that Social Security winds up paying you a much more generous benefit than it pays the typical recipient. In fact, beneficiaries today have the potential to score as much as $3,895 a month in Social Security income.
If that sounds good to you, you may be wondering how to snag a benefit that high. And the reality is that it won't be easy.
There are factors that may fall outside your control that prevent you from getting to collect that maximum benefit. But if you're eager to go after it, here's what you'll need to do.
1. Work at least 35 years
The monthly benefit you're able to collect in retirement will be based on your earnings during your 35 highest-paid years in the workforce. If you don't manage to work for 35 years, you'll have a $0 salary factored into your personal benefits calculation for each year there's no income for you on file. As such, you'll need at least 35 years of earning a paycheck under your belt to snag the maximum benefit.
2. Make sure your earnings match or exceed the annual Social Security wage cap
Higher earners don't necessarily pay Social Security taxes on all of their income. Rather, there's a wage cap that changes from year to year that determines how much income gets taxed.
Right now, the wage cap is $142,800, and earnings beyond that point aren't subject to Social Security taxes. They also don't count toward calculating your future Social Security benefit.
To claim the maximum monthly benefit, you'll need to make sure your earnings match or surpass the wage cap each year over a 35-year period. To be clear, you don't need to earn the maximum wage for 35 years in a row. You just need to earn it during your 35 highest-paid years in the labor force.
3. Delay your Social Security filing
You're entitled to your full monthly Social Security benefit based on your earnings history once you reach full retirement age (FRA). FRA is either 66, 67, or somewhere in between, depending on your year of birth.
However, you're allowed to delay your filing past FRA. For each year you do, your monthly benefit will get an 8% boost, up until the age of 70, at which point that incentive runs out.
For some people, delaying benefits until age 70 just isn't realistic, and if you're forced to retire before age 70, you may have to claim Social Security to ensure that you're able to pay the bills. But if you want to snag the maximum monthly benefit, you'll need to hold off on filing until your 70th birthday.
Could you walk away with $3,895 in Social Security?
As you can see, scoring the maximum Social Security benefit isn't easy. You need to make sure to work long enough, earn enough, and delay your benefits (which you might plan to do until life gets in the way).
But even if you don't manage to snag a monthly benefit of $3,895, that doesn't mean you can't do your part to squeeze as much money as you can out of Social Security. If you're nearing retirement and you've only worked 34 years, consider putting in one extra year on the job.
And if your earnings aren't as high as you'd like them to be, supplement your income with a side job. Those wages will count toward Social Security as long as you pay taxes on them.
Finally, if it's possible, delay your filing until the age of 70 so that you're able to boost your monthly benefit by 24% or more. A higher Social Security benefit could set the stage for a stress-free retirement, so do your best to get as large a monthly paycheck as you can.
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