Are you eligible for the maximum Social Security benefit of $ 4,194 in 2022?

NOTIn the beginning, 70 million people in the United States receive Social Security benefits. But very few are eligible for the maximum social security allowance. In 2021, the maximum monthly check is $ 3,895, or $ 46,740 per year. But because of the soaring inflation, the maximum benefit will increase to $ 4,194 per month in 2022, or $ 50,328 per year, an increase of 5.9%.

However, a typical retired worker receives less than half of the maximum Social Security check. The average monthly retirement benefit was only $ 1,559 in September 2021.

Wondering if your future Social Security check will be close to the maximum? Sorry, but there are no easy hacks. Here are the three things you will need to do to make it happen.

Image source: Getty Images.

Work for at least 35 years

Your Social security benefit is based on your top 35 years of earnings, so the first thing you need to do to get the maximum benefit is work for at least 35 years. If you only work 25 years, the other 10 years will be entered as zeros when calculating your average Social Security salary. If you don’t reach the 35-year mark, even for just one year, you won’t get the maximum benefit, no matter how much you’ve earned in the other 34 years.

Have had a high income for at least 35 years

Just working 35 years isn’t enough if you want the biggest monthly checks. Your income must be equal to or greater than the maximum social security taxable income for each of these 35 years.

This figure is adjusted each year to reflect the evolution of salaries. In 2021, the maximum taxable income is $ 142,800. It will rise to $ 147,000 in 2022. Earning enough to exceed maximum taxable income for at least 35 years is by far the most stringent requirement for maximum Social Security benefit. Only about 6% of workers will earn that much in any given year.

Maximum social security benefit by age in 2022

Data source: Social security administration.

Wait until you turn 70

You are entitled to receive social security retirement benefits from the age of 62. If you are receiving a surviving spouse’s benefit, you only have to wait until age 60, or 50 if you are disabled. But if you don’t wait until you’re 70 to cash, you won’t receive the maximum check each month.

Your social security benefit is based on the amount of your primary insurance, which is the amount you will be entitled to full retirement age. Applying as soon as you are eligible at age 62 reduces your benefits by up to 30%.

But for each year of delay beyond the full retirement age, you will earn 8% deferred retirement credits. To get the most out of Social Security, you’ll need to accumulate all of these deferred retirement credits. They will stop accumulating once you reach the age of 70, so once you are in your seventies there is no point in waiting any longer.

As you can see in the table above, the difference between a claim at 62 and at 70 is substantial. Waiting until age 70 gives a 77% higher benefit.

Should we count on the maximum benefit of Social Security?

Getting the biggest monthly Social Security check is a great goal. But even if you have a high income, you shouldn’t count on the maximum benefits.

Even having a year or two when your income is insufficient can reduce your payments. In addition, many seniors are forced to leave the workforce sooner than they expected. Health issues, layoffs, age discrimination and caregiving responsibilities often disrupt plans to continue working. In all of these situations, holding out to age 70 may not be realistic.

Waiting to start receiving benefits can certainly pay off, but it’s critical that you start saving for retirement early and continue to do so throughout your career. Retirement will be much easier if you don’t plan to take every penny out of Social Security.

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