Social Security is an important source of income for most seniors. That’s true despite the fact the average benefit in 2022 will be $1,657 per month, which means benefits will provide a total of just $19,884 next year for the typical American.
Some retirees, however, will end up with a lot more money than that.
In fact, a small minority of seniors could see Social Security checks totaling $50,328 in 2022. If you want to bring home such hefty checks, here’s what you’d have to do.
How can you end up with $50,328 in Social Security checks?
In order for your monthly Social Security payments to add up to $50,328 in 2022, you would need a monthly payment equaling $4,194. That just so happens to be the maximum benefit the Social Security Administration will send out next year.
A maximum benefit exists for a simple reason. Social Security benefits equal a percentage of your inflation-adjusted average wages over 35 years. But not all wages count. Each year, the Social Security Administration sets a wage cap or wage base limit. Any wages earned above the cap aren’t taxed but won’t count when a person’s benefits are calculated.
So if you want $50,328 in Social Security checks, you’d need to earn at least the wage base limit for at least 35 years of your career.
You’d then need to put off claiming Social Security until age 70. This second step is necessary because the standard benefit each retiree gets (based on their average wage) is increased by delayed retirement credits that can be earned between full retirement age (FRA) and 70.
So even if you earned the largest average wage you could get, you’d also need to max out these credits to boost your Social Security checks to the absolute maximum of $4,194 per month, or $50,328 per year.
Very few Americans will get $50,328 in Social Security checks in 2022
Chances are very good your Social Security check isn’t going to provide $50,328 in 2022. That’s because very few Americans have earnings equaling the wage base limit for 35 full years. And not many people delay their first check until 70, either.
In 2022, the wage base limit will be $147,000. This number gives you an idea of just how high the wage cap is, although it does change each year due to inflation. Even if you manage to earn such a hefty amount in some years during your career, you aren’t going to get the maximum monthly benefit if you don’t do it for a full 35 years.
And if you do mange to earn the inflation-adjusted equivalent of $147,000 for that long, you’ll still need to wait until well after the age at which most people retire to start bringing Social Security checks home. So you’ll need to work much longer than normal or have plenty of savings to tide you over until you file for benefits at 70.
Still, you can work toward accomplishing these goals by aiming to increase your income and planning a delayed benefits claim. Even if you don’t end up with $50,328 in benefits, you’ll still increase the amount of Social Security income you end up with.
Just remember, though, that even with a hefty check, Social Security replaces only around 40% of pre-retirement income. So you’ll need savings to supplement your benefits if you want to maintain your standard of living after leaving the working world.
Start working on building your nest egg ASAP, while also aiming to max out your Social Security income, and you should be able to set yourself up for a secure retirement.
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