If you’re gearing up to claim Social Security before 2022 comes to an end, you should ideally have a good sense of what monthly benefit you’re in line for. But some seniors don’t have that information by the time they’re ready to sign up and wind up surprised when their first Social Security payment comes in.
Now you should know that the maximum monthly benefit you can collect from Social Security this year is $4,194. But most seniors don’t wind up with a benefit that high — not even close. So if you fall into the majority, don’t panic, because there are other steps you can take to boost your retirement income.
Image source: Getty Images.
Why it’s tough to snag the maximum monthly benefit
To qualify for a monthly payday of $4,194 from Social Security this year, you’ll need to have:
Worked 35 years at a minimum.
Earned a salary that’s equivalent to the wage cap for 35 years.
Delayed your Social Security claim until the age of 70.
The Social Security Administration takes your 35 most profitable years of earnings into account when calculating your monthly retirement benefit. Meanwhile, each year, a wage cap is put into place for imposing Social Security taxes on earnings and counting earnings toward future benefits.
This year, that cap was $147,000. Of course, in the past, it’s been lower. But you’ll need to have earned the wage cap equivalent for 35 years to score the highest monthly benefit Social Security will pay out.
Furthermore, you’re entitled to your full monthly Social Security benefit based on your wage history at full retirement age. But to be eligible for $4,194 a month, you must delay your filing until the age of 70.
Clearly, it’s not an easy thing to meet all of the above criteria. And that explains why most seniors end up collecting a lot less than $4,194 from Social Security every month.
Other great income sources
The monthly benefit you’re eligible for from Social Security may be much lower than $4,194. It may even be less than half. But that doesn’t mean you’re destined for a cash-strapped retirement, because there are other things you can do to boost your income.
First, you could consider working part-time. Doing so might not only put a paycheck in your pocket, but also get you out of the house, which is an important thing.
You could also look at turning your home into an income source. Let’s say your house has a finished basement you don’t really use all that much. You could invest in a small kitchen and bathroom, rent out that space on a long-term basis, and use the money you collect from tenants to help cover your bills.
All told, you shouldn’t sweat it if you’re not eligible for the maximum monthly benefit Social Security is paying this year. If that’s the case, you’re not the exception — you’re really more of the norm. And you have also other options for getting your hands on the extra income you want or need.
The $18,984 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 $18,984 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.
The Motley Fool has a disclosure policy.
