The Social Security Administration has very clear rules to calculate the benefits that a retiree will receive, so there are two characteristics that you must have as a worker to get the maximum payment of $4,194 dollars per month
Many people in the United States, workers or retirees, complain that Social Security income is not large enough to support retirement. How about $4,194 a month for you? That’s the maximum monthly benefit from this program for 2022 (it’s expected to grow considerably with the COLA next year), but do you know how to get it? Here we explain it to you.
Social Security benefits are calculated based on two main aspects:
1. Your income obtained during 35 years of work
2. The age at which you claim benefits
We are not going to deceive you, as you may be intuiting, the possibility of obtaining the maximum Social Security, if you plan to retire this year, may be remote.
To get $4,194 a month, you had to have earned the inflation-adjusted equivalent of $147,000 for 35 years and wait to claim your benefit until age 70. If you meet these two requirements, congratulations, you guarantee yourself the maximum monthly income that the Social Security program can currently offer you.
The maximum Social Security benefit is only available if you earn the maximum income counted to determine your benefit and if you earn the maximum number of delayed retirement credits that increase your standard retirement benefit.
There is a maximum income that counts toward your benefits because there is a cap on the amount of money that pays Social Security taxes. It’s called the “salary base limit.” It is $147,000 in 2022, but is regularly adjusted for inflation.
All earnings at or below the salary base limit become part of your earnings history. Social Security adjusts your annual countable wages for inflation and takes an average of what you earned in your highest earning 35 years. You get benefits equal to a percentage of that average.
In a nutshell, if you earn less than the salary base limit in any of the 35 years included within this formula, rest assured that your benefit will fall below the maximum amount available, because you will not have the highest average salary. possible.
But it is not the only thing. Assuming you earned more than $147,000 during your best 35 working years, you still need to grow it by earning delayed retirement credits. These credits are available after your designated full retirement age, between ages 66 and 67, depending on your date of birth, and can be earned until age 70. If you miss even one month of delayed retirement credits, you won’t increase your standard benefit and you’ll miss out on the maximum benefit.
But don’t feel bad, just like you, the vast majority of beneficiaries do not get the long-awaited $4,194 Social Security check, there is only a tiny percentage of people who do. You should consider that the program is designed to replace only 40% of your pre-retirement income. That’s why it’s always a good idea to open an individual retirement account (IRA) or maximize your contributions to a 401(k) plan as much as possible.