Here’s Exactly How to Maximize Social Security’s $4,194 Monthly Maximum

In 2022, the largest monthly retirement check sent by the Social Security Administration totals $4,194 per month. This is well above the average edge of $1,657. Obviously, if you can get such a large check, it will go a long way to providing you with financial security in your later years — although you probably can’t live on Social Security alone.

So how can you get on the path to such a big payout? Here are the steps to follow.

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Plan to work a long time

The Social Security benefit formula allows workers to receive a monthly payment equal to a percentage of their average indexed monthly earnings (AIME). AIME is your average monthly salary based on your earnings over the 35 years you earned the most money, after adjusting salaries each year for inflation.

If you haven’t worked for at least 35 years, your AIME on which benefits are based will be reduced. The reason is simple. Each time you include zeros when calculating an average, it decreases it. And the zeros will be included in your AIME calculation for any year you missed.

Most people work that long, but you’ll have to make sure you do if you want a $4,194 Social Security benefit. In fact, there’s a good chance you’ll have to work even longer for reasons which will be explained below.

Build strong job skills that earn you a high income

If you want to receive maximum Social Security benefits, it is not enough to work for 35 years or more. In each of these relevant years, you must earn something called the “maximum taxable salary”, i.e. “the basic salary limit”.

This limit is the maximum amount of annual income subject to social security tax. Earnings above that are not taxed, nor do they count in your AIME calculation. The existence of this limit is why there is a cap on the monthly Social Security checks people receive. In 2022, for example, the maximum taxable salary is $147,000. If you earn $148,000, you would only have $147,000 included in your AIME and used to calculate your monthly Social Security check.

The wage base limit changes over time, but is always the inflation-adjusted equivalent of that amount. And only the highest earners in the country have an income equal to or greater than this. If your earnings in just one of the 35 years included in your AIME calculation are below the limit, you cannot get the maximum benefit of $4,194.

Now, that doesn’t mean you have to earn the limit for your entire career. Let’s say, for example, that you earn less in the first two years as you progress. You would need a 37-year career to be on track for the highest possible payout in this case, so each of the 35 years included in your formula was as high as possible.

It can be difficult to make that much money. So if you want to make sure you maximize the maximum benefit of $4,194, you’ll need to develop job skills that will make you one of the top earners in the country.

Prepare for a late retirement

The maximum monthly Social Security benefit is not earned just earning paychecks equal to or greater than the highest taxable salary each year. This will allow you to maximize your Standard benefit by earning the maximum AIME used to calculate it.

But the standard benefit is lower than the highest possible monthly benefit. This is because it can be increased by delaying when you claim your payments. Social Security check amounts are based on both your income history and the age at which you apply for benefits. If you wait until age 70, you will increase your potential payment each year beyond age 62 when you first become eligible.

If you can’t support yourself without Social Security checks and want the maximum monthly benefit, you’ll have to postpone your retirement until you can receive your payments. That would mean staying on the job until age 70, which is much later than most people retire.

As you can see, there’s a lot of tough work on your plate if you want a monthly Social Security check of $4,194. In fact, you may not be able to complete them all. It might be a lot easier to just accept that your retirement benefits are much lower than that amount and focus on building a big nest egg to supplement the income those benefits provide.

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