Are You on Track for the $4,194 Max Social Security Benefit?

Signing up for Social Security is a decision not to take lightly because your filing age could impact the benefit you receive. But there are other factors that will influence your benefit, too, and if you play your cards right, you could end up collecting a lot of money.

The maximum benefit you can collect in 2022 is $4,194, which is considerably higher than the average monthly benefit of $1,657. But to claim that maximum benefit, you’ll need to meet a few criteria that aren’t so easy to satisfy.

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1. You’ll need very high lifetime earnings

Social Security benefits are based on lifetime earnings — or more specifically, your earnings during your 35 most profitable years in the labor force. Each year, there’s a limit as to how much income counts for the purpose of calculating Social Security benefits. This year, it’s $142,800. In 2022, it’s $147,000.

To be eligible for the maximum Social Security benefit, you’ll need to have earned enough money for 35 years to have met that income cap. If you have even a couple of years where you didn’t earn that max, then you won’t be able to collect $4,194 a month in Social Security in 2022.

2. You’ll need to delay your filing as long as possible

You may be thinking of claiming Social Security in the near term if you recently reached full retirement age, or FRA. That’s the age at which you can collect the full monthly benefit you’re eligible for, based on your earnings history.

But if you want to snag the maximum Social Security benefit, waiting until FRA won’t cut it. Rather, you’ll need to delay your filing to age 70.

For each year you hold off on benefits past FRA, they’ll grow by 8%. That incentive runs out at age 70, but you’ll need to wait until your 70th birthday arrives if you want that maximum benefit.

What if you can’t snag the maximum Social Security benefit?

If your career earnings aren’t high enough to render you eligible for the maximum monthly Social Security benefit or waiting until age 70 to file doesn’t align well with your plans, don’t sweat it. Most seniors don’t collect the maximum benefit and manage just fine with the income they do receive from Social Security.

That said, if you don’t think you’ll qualify for the maximum Social Security benefit, take a look at your retirement savings balance before making the decision to leave your career behind. You’ll want to make sure you have a strong enough nest egg to supplement your Social Security income, whether the benefit you’re entitled to is close to the maximum or nowhere near it.

Remember, too, that while the maximum Social Security benefit is quite generous if you’re entitled to it, it means you’re probably used to living on a substantial income. And chances are, you’ll still need a healthy level of retirement savings to supplement that benefit if you want to maintain the lifestyle you’re used to once you retire.

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