Here’s Exactly How to Optimize for the $4,194 Social Security Monthly Max

Does receiving a $4,194 monthly Social Security check sound good? Chances are that getting such big payments will be just a dream for many — especially since the average monthly benefit is just $1,657 in 2022.

While getting a $4,194 check is definitely possible, it’s not at all easy. In fact, that’s the largest possible monthly benefit Social Security provides, and only a very small percentage of retirees come even close to receiving so much. If you want to be one of them, here’s what you would need to do.

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Social Security benefits are specifically designed to replace a percentage of preretirement earnings. As a result, only the country’s highest earners will get the largest possible benefit.

How much would you have to earn, exactly? To get the largest available monthly payment, you’d need the maximum amount of preretirement earnings. Since the amount you can earn is theoretically unlimited, that may seem impossible. But, you need to understand that not every dollar of wages earned counts when Social Security benefits are calculated.

The entitlement program isn’t meant to provide tens of thousands of dollars in income to people who earn millions. As a result, there’s a cap on the earnings counted when benefits are calculated. It’s called the wage base limit. Anything you earn above it isn’t subject to Social Security tax and it isn’t considered in the benefits formula.

This wage cap is pretty high — $147,000 in 2022 — and it’s a figure that is adjusted upward each year based on the inflation rate. So, you’d have to earn a salary well above what most people make if you want a chance at a $4,194 benefit.

You’d also have to do this for a long time because the Social Security Administration calculates benefits based on the amount earned during your 35 highest-paid years (after adjusting for wage growth). To get the biggest possible checks requires 35 years of earnings equal to (or exceeding) the wage base limit. So you’d need to start making a lot of money each year starting at a pretty young age and consistently count yourself among the country’s highest earners for the majority of your career.

If your earnings didn’t equal or exceed the wage base limit by, say, age 40, you’d have to work until at least 75 to get in a full 35 years of maximum earnings to score the largest possible benefit.

Make a solid plan to claim Social Security benefits at the age of 70 and not before

Earning an income equal to (or above) the wage base limit for 35 years will open the door to a $4,194 Social Security check, but it’s not going to be enough by itself.

Social Security’s formula based on average wages is used to calculate your standard benefit, or primary insurance amount (PIA). But your PIA is available only if you get your first Social Security check exactly at your designated full retirement age (FRA). FRA is between 66 and four months and 67 and is based on the year you were born.

If you max out your standard benefit, you still won’t get the largest possible $4,194 Social Security payment because there’s a way to increase your PIA. Social Security penalizes people who claim benefits before FRA and rewards people who claim after. Until age 70, you can earn delayed retirement credits that raise the amount of your standard benefit by two-thirds of 1% per month or 8% annually.

The max benefit, therefore, is available only to people who have the largest possible average wage and who earn the most delayed retirement credits offered.

Working until 70 often isn’t possible because of health or family issues. But to be on track to get the biggest Social Security check, you’ll have to either stay on the job for that long or have other money to support yourself if you retire earlier. Since you can’t always control how long you’re employed, you’ll want to ensure you have a hefty investment account balance to support you until 70 without a supplement from Social Security.

As you can see, earning the max benefit is possible, but it’s difficult to do. If you don’t think it’s within reach, you may need to accept your Social Security payment will be smaller than the maximum and plan accordingly for how much support it will actually offer.

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