The maximum monthly Social Security benefit in 2022 is $4,194. So do you get this generous allowance every month after you retire?
Here’s what you need to know to determine your eligibility.
How much money have you earned over the course of your career?
The maximum monthly benefit of $4,194 is only available to people who have earned above a certain amount for at least 35 years.
There is a “wage base cap” each year that applies to Social Security. Income below the limit is all subject to Social Security taxes and all of this counts towards determining how large your benefit checks will be. But income above it is not taxed and not counted.
Because the benefit is based on the average pay, the highest possible benefit is determined on the basis of the wage base limit. And your own benefit is based on how your earnings compare to it.
In 2022, the wage base limit is $147,000. This limit is adjusted periodically due to inflation, so it is always the equivalent of that amount. If you don’t earn at least that amount — or the inflation-adjusted equivalent — for 35 years, you can’t get the $4,194 benefit.
How old are you when you apply for social assistance benefit?
The maximum benefit of $4,194 is also only available to people who are maxing out their deferred retirement credits.
See, you can maximize your pay every year by earning at least the pay base cap and this will put you on track for the highest possible benefit. But if you claim Social Security before age 70, you will not get the maximum monthly Social Security income. For example, if you claimed at full retirement age, the maximum monthly benefit would be $3,345 in 2022.
Your earnings over your career determine your standard benefit available at full retirement age (FRA). But you can shrink your checks from your standard benefit if you claim them before FRA and increase them if you claim them after — but only until age 70.
So to get the maximum monthly benefit you will need:
- The highest average wage available to maximize the standard benefit you would receive at full retirement age (which you would only have if your income was equal to or greater than the wage base for 35 years or more).
- To increase that standard benefit as much as possible by waiting until age 70 to claim your first Social Security benefit.
Achieving both things will be difficult for most people. The average person does not earn the inflation-adjusted equivalent of $147,000 for 35 years. And the typical person doesn’t wait until age 70 to claim Social Security.
But you can still try increasing your earnings and deferring your claim for retirement benefits if you want to get the largest benefit achievable in your particular situation.
By agreeing now that your benefits will likely also be well below $4,194, you can also ensure that you have a realistic idea of what Social Security will provide. This allows you to save additionally.
The average benefit is $1,661 in 2022, so chances are your retirement income from this source will be much more modest than the $4,194 maximum available.
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