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In 2022, the maximum Social Security benefit is going up. Retirees next year could receive as much as $4,194 per month. This would provide a relatively generous annual income of $50,328, considering the average Social Security benefit next year will be just $1,657.
Find out below how to get such a hefty Social Security check.
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What does your earnings record look like?
Your income is the single most important factor that determines if you’ll max out your Social Security or if you’ll fall short. To determine how much you’re entitled to, the Social Security Administration uses this formula:
It tracks your average wage throughout your career, giving you credit for income up to its so-called wage base limit.
It then adjusts your wages for inflation.
And it determines your monthly average wage, based on the 35 years your earnings were highest.
You then receive benefits equaling a percentage of your average monthly wage. But only wages up to the wage base limit count in this formula. That limit is why there’s a set maximum Social Security benefit. Otherwise, people who make millions of dollars a year would have a huge Social Security check.
To avoid this, the wage base limit sets a maximum countable (and taxable) wage each year. In 2022, it will be $147,000. Most people don’t earn that much, so the limit doesn’t affect them. Every dollar they earn counts toward the determination of their benefit. But if you want to be among the small percentage of people who max out Social Security checks, you’ll need to earn at least that amount in 2022 — as well as the inflation-adjusted equivalent every year for at least 35 years.
You can check your earnings record by opening a mySocialSecurity account.
When are you planning to claim Social Security benefits?
Your age when you first claim Social Security also determines if you are maxing out your benefits. That’s because the benefits formula mentioned above is used to determine what you’d get at a designated full retirement age, which will be between 66 and 4 months and 67 starting in 2022.
Benefits can be claimed between ages 62 and 70, but if you hope to get that maximum check mentioned about, you’re going to have to wait to claim until 70. Late filers get delayed retirement credits that boost their standard benefit to the highest level.
If you haven’t earned the inflation-adjusted equivalent of $147,000 for 35 years, you aren’t going to in the future, and you aren’t going to wait until 70 to claim Social Security, you aren’t on track for the max benefit in 2022.
You can still take steps to try to increase your Social Security checks, though, such as by waiting as long as possible to claim them and making sure you get your highest earnings possible in those 35 years that count when your benefit is set.
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