Don’t Worry if You Don’t Get the Maximum Social Security Benefit. Do This Instead

The maximum benefit you can collect from Social Security in 2022 is $4,194. But that’s way higher than what the typical senior receives.

The average Social Security beneficiary in 2022 will receive a monthly payday of $1,657. That’s after accounting for the 5.9% cost-of-living adjustment that went into effect this year.

Now if your goal is to snag the maximum Social Security benefit once you retire, there are a few things you’ll need to do. In short, you’ll have to earn a very high wage for at least 35 years, and you’ll also have to delay your Social Security filing until age 70.

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Depending on how your circumstances shake out, either of those could be a tall order. While you can do your best to build job skills and work hard, you won’t necessarily raise your earnings to the point where you’re eligible for the most money Social Security will pay out. And while you can certainly plan to file for benefits at age 70, if health issues or layoffs force you retire early, you may have to claim benefits sooner.

That’s why fixating on snagging the maximum Social Security benefit may not be the best use of your time or energy. Instead, there’s a better way to set yourself up for a financially solid retirement.

Rely less on Social Security and more on your own savings

Social Security will generally replace about 40% of your income if you’re an average earner. If you’re able to delay your filing and snag the program’s maximum monthly benefit, you might score a higher percentage of replacement income.

But generally speaking, you should expect to need about 70% to 80% of your former paycheck to maintain a decent standard of living once your time in the labor force comes to an end. And since claiming the maximum Social Security benefit isn’t an easy thing to do, it pays to instead work on building as much of a nest egg as you can.

If you consistently contribute money to a dedicated retirement plan and invest your savings wisely and aggressively, you might grow enough of a nest egg that it won’t actually matter how much income you get from Social Security, let alone whether you’re getting the highest monthly benefit or not.

In fact, imagine you’re able to sock away $500 a month for retirement over a 40-year period. If you were to invest your savings in stocks, you might snag an average annual 8% return in your retirement plan, since that’s a few percentage points below the market’s average, leaving you with a nest egg worth a little more than $1.5 million.

Extending your savings window or monthly contribution could leave you with even more money than that. Save $500 a month at an average annual 8% return for 42 years, and you’ll end up with over $1.8 million. Or, stick to that 40-year window but ramp up your monthly contributions to $700, and you’ll have close to $2.2 million.

Now having a larger nest egg doesn’t mean you should give up on growing your Social Security benefit. But it could make it so that you’re not stressed over the fact that despite your best efforts, the maximum monthly benefit just isn’t attainable.

Set realistic goals

A lot of things have to fall into place for you to claim the maximum Social Security benefit. But remember, even if that doesn’t happen for you, you might still manage to score a benefit that’s close to that $4,194 max. And if you map out a savvy filing strategy while concentrating on building a nest egg, you’ll set yourself up for a very comfortable retirement, financially speaking.

The $16,728 Social Security bonus most retirees completely overlook
If you’re like most Americans, you’re a few years (or more) behind on your retirement savings. But a handful of little-known “Social Security secrets” could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $16,728 more… each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we’re all after. Simply click here to discover how to learn more about these strategies.

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