Want the Max $4,194 Social Security Benefit? Here’s the Salary You Need

Each year, there’s a maximum Social Security benefit. In 2022, the largest monthly check a retiree could receive from the Social Security Administration is $4,194. This is a substantial sum, especially considering the average senior on Social Security has a monthly benefit of $1,657.

While a Social Security check that gives you $50,328 per year to live on may sound really nice, it’s probably not going to happen for you. That’s because there’s a certain minimum salary you’d have to earn to end up with so much retirement money — and it’s well above the amount most people make each year.

The salary needed to max out Social Security benefits is shockingly high

To be on pace to earn a $4,194 Social Security benefit, your earnings in 2022 would need to be at least $147,000. Considering the fact that the Bureau of Labor Statistics data shows average weekly earnings were $1,095.83 as of February 2022, the typical worker will be about $90,000 short.

Even those lucky enough to earn $147,000 or more this year will also need to have high earnings for many additional years as well. In fact, it’s necessary to have at least a 35-year history of being among the country’s highest earners in order to be on track to max out your monthly Social Security payments.

Why is the salary necessary to earn a $4,194 Social Security benefit so high?

To understand why you’d need to earn $147,000 or more in order to max out Social Security, it’s helpful to have some background in how your retirement benefits are determined.

Social Security benefits are calculated based on a formula that gives you retirement income equaling a percentage of the average wage you earned over 35 years (with each year’s wages adjusted for inflation). Specifically, the benefits formula is targeted to give workers a check equaling about 40% of pre-retirement earnings. This money is supposed to be one of several sources of support, along with savings and employer-provided pensions.

Based on how the benefits formula works, someone who earned the inflation-adjusted equivalent of $1 million per year would theoretically receive around $400,000 in annual benefits. But lawmakers who created Social Security decided they wanted to cap the amount someone could get so the wealthiest Americans didn’t receive huge monthly payments. As a result, they set a “wage base limit.”

Every dollar up to the wage base limit is subject to Social Security tax, and is counted when determining the average wages benefits are based on. The wage base limit is adjusted according to inflation each year. As you can see, though, it’s pretty high, at $147,000 in 2022.

For someone to get the max benefit, they’d need to earn at least that limit each year for 35 years — so you’d need to earn the inflation-adjusted equivalent of $147,000 for more than three decades to be on track for the highest possible Social Security check.

If you’ll fall far short, don’t feel bad — only around 6% of workers each year have an income equal to or exceeding this limit, so very few Americans get a $4,194 monthly check. Just be aware that your own payment is likely to be much lower, and plan to have savings to supplement it since you can’t comfortably live on 40% of pre-retirement earnings alone.

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