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Are You Within Spitting Distance of the $3,895 Social Security Max Benefit?

By Christy Bieber – Oct 30, 2021 at 5:53AM

Key Points

  • Only a small percentage of Americans get the maximum Social Security benefit.
  • Your income could determine if you're one of them.
  • So could the number of years you're planning to work.

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There are a few things you'll need to do to max out your Social Security checks.

The $3,895 maximum Social Security benefit in 2021 is more than double the average benefit and provides a generous $46,740 in annual income. 

While this may sound like a nice amount of money as a senior, very few people end up maxing out their Social Security checks. To find out if you're in spitting distance of earning this generous benefit, there are four questions you need to answer. 

Two adults reviewing financial paperwork.

Image source: Getty Images.

1. How much is your past and current income?

In order to be on track for a $3,895 Social Security benefit, you'd need to earn $142,800 or more in 2021. In 2020, you'd have needed to earn $137,700. And in prior years, you'd need to have earned the inflation-adjusted equivalent of this amount. 

This sounds like a lot of money, and it is. But there's a reason you would need to earn so much. It's because $142,800 is the "wage base limit," or the maximum income on which you pay Social Security benefits tax.

Each year, there's a wage base limit. If you earn more than that amount, you won't pay Social Security tax on the excess and it won't count in your earnings record. Your earnings record is what determines your Social Security benefit. You can't earn the maximum Social Security benefit unless you have the maximum taxable earnings. 

The more you fall short of this salary, the further off track you are from earning the maximum $3,895 benefit. 

2. How much do you expect to earn in the future?

It's still possible to max out your Social Security benefits even if your salary is, and always has been, below the wage base limit -- as long as you plan to earn a lot more in the future. 

See, Social Security calculates your benefits based on your inflation-adjusted earnings only in the 35 years when you earned the most. If you haven't yet earned the taxable maximum but you have more than 35 years left in your career, it's still possible to get back on track to a $3,895 benefit as long as you earn more than the wage base limit going forward.

This gets harder to do each year, though. In 2022, for example, you'll need to earn $147,000 or more since the limit is going up. 

3. How long do you expect your career to last?

Remember the 35-year rule mentioned above. If you work less than 35 years, some years of $0 wages are included in your average.

So, if you earned the maximum taxable wage for 34 years, you'd lose out on the ability to earn the $3,895 maximum Social Security benefit because of the one year of $0 wages included when your benefits are calculated. The shorter your career history, the more years of $0 wages will be part of your average and the more you'll fall short of maxing out your checks. 

And, if you don't earn the wage base limit every year that you work, your career will need to last longer than 35 years because you'll need to push out some of those lower-earning ones. 

4. When do you plan to claim benefits? 

Finally, you'll need to wait until the age of 70 to start getting your Social Security benefits if you hope earn the highest possible check. That's because the $3,895 max benefit is available only to people who earn the maximum number of delayed retirement credits.

Delayed retirement credits become available after you reach full retirement age. You earn them for each month after FRA until age 70 and they raise your benefit by two-thirds of 1% per month. If you claim checks before 70, you won't earn the full benefits boost available and will end up falling short of the $3,895 maximum.

Delaying a benefits claim until 70 is challenging for many retirees, as is earning at least the wage base limit for 35 years. Don't worry if you end up falling short of earning the maximum Social Security check. Instead, focus on saving money so you have plenty of income to supplement the retirement benefits you do end up with. 

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