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How Will Your Social Security Stack Up to the $4,194 Max?

By Robin Hartill, CFP® – Dec 7, 2021 at 5:08AM

Key Points

  • The maximum Social Security benefit will be $4,194 in 2022.
  • The average retiree's check is less than half that much.
  • To collect the maximum benefit, you need to be a high earner for at least 35 years and wait until you're 70.

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Here's why it's so hard to score Social Security's biggest benefit.

In 2022, the maximum Social Security benefit will be $4,194 a month. But the average monthly benefit? It'll be nowhere close.

The average check for retired workers was $1,562 in October 2021. When you account for the 5.9% cost-of-living adjustment (COLA) that Social Security recipients will get in the new year, someone currently receiving $1,562 would see their payments increase to $1,654.

To get the maximum Social Security benefit, you have to do three things:

  • Wait until you're age 70
  • Work for 35 years
  • Earn at least the maximum Social Security taxable income for 35 years

Wondering whether you'll be able to get there? Let's break down each requirement a little further.

A person wearing sunglasses sits in a city park.

Image source: Getty Images.

Can you wait until age 70?

Retired workers can start benefits as early as age 62 or as late as age 70. But claiming benefits at 62 instead of waiting until your full retirement age (FRA) -- which is between 66 and 67, depending on when you were born -- reduces your benefits by about 30%.

On the flip side, for each year you delay after full retirement age, you'll earn an 8% delayed retirement credit until your benefit maxes out at 70. Claiming at age 70 produces a benefit that's about 77% higher, compared to claiming at age 62.

The average age for starting benefits has risen in the last two decades. But very few workers hold out until age 70. In 2018, the average claiming age was 64.7 for men and 64.6 for women. Nearly 90% of people ages 65 and older were receiving a Social Security benefit by the end of 2020.

Will you work for at least 35 years?

To get Social Security's maximum benefit, you'll need to work for at least 35 years. Social Security bases your benefits on your highest 35 years of earnings, which we'll break down in greater detail shortly. If you only work 34 years, Social Security will use those 34 years of earnings and input the 35th year as $0. Falling short by even one year will stop you from collecting the maximum benefit.

Are you a high earner?

Collecting the biggest possible Social Security check requires you to collect a big paycheck for at least 35 years, as well. In order to score the maximum benefit, you'll need to earn the maximum Social Security taxable income for 35 years or more. In 2021, that amount is $142,800. It rises to $147,000 in 2022.

By comparison, full-time workers had median weekly earnings of $1,001 in the third quarter of 2021, according to data from the U.S. Bureau of Labor Statistics. That works out to $52,052 a year.

Since 1983, only about 6% of workers have earned more than Social Security's maximum taxable income in any given year. Very few workers will earn this much for 35 years, which is why your payments will probably fall short of the maximum, no matter how long you work or delay benefits.

Why you may not want Social Security's max benefit

It's highly unlikely that you'll qualify for Social Security's maximum benefit. So the question is really: Should you hold out for the biggest possible benefit you could receive?

Delaying Social Security past age 62 to increase your benefit can be a smart move, particularly if you enjoy working or are falling short on retirement savings. But a lot of people can't afford to hold out for the maximum benefit, given that seniors are often forced out of the workforce sooner than they expected. There's also quality of life to consider. Taking a lower benefit sooner may help you enjoy your retirement years more.

You should also take into consideration your life expectancy. You'd need to live to be 78 in order to get more out of Social Security by claiming at 70 vs. age 62. Obviously, none of us can predict when we'll die, but the certainty of collecting money sooner may be worth the unknowns associated with waiting longer.

Regardless of whether you want your benefits sooner or later, try to invest at least 15% of your pre-tax income in a retirement account. Your senior years will be much easier if Social Security isn't your only income source.

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