In 2022, a small minority of retirees will receive a $4,194 monthly check from the Social Security Administration.
This is the largest monthly payment available, and such large payments go only to the wealthiest Americans who earned the inflation-adjusted equivalent of $147,000 during at least 35 years of their career.
The good news is, if you aren't on schedule to receive so much money, you still have plenty of options to bring in ample retirement income. Here are three of the best solutions to build the financial security you deserve in your later years -- even if you can't come close to maxing out Social Security checks.
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1. Maximize your own benefits
Although it's difficult or impossible for most people to increase their income enough to get the maximum Social Security benefit, this doesn't mean that you can't -- or shouldn't -- take steps to try to increase your own payments.
There are a huge number of ways to make certain you take full advantage of Social Security, even if your checks will be well below the $4,194 max. Options include:
- Being strategic in when you claim benefits. This could mean starting them at a younger age to maximize lifetime income if you fear your health is poor and you won't live very long. Or it could mean waiting as long as possible to get higher monthly payments, even though this means forgoing some checks early on. You'll want to calculate how long it will take you to break even if you delay a Social Security benefits claim so you can decide what strategy is best for you.
- Increasing income throughout your career. The higher your income, the bigger your monthly benefit. Make it a point to pursue new job opportunities when the labor market is competitive and to always negotiate your salary when getting hired and during annual performance evaluations.
- Coordinating with your spouse. Making a strategic plan to make the most of survivor or spousal benefits can help you and your partner to get more income as a couple.
Increasing your benefits is a smart financial choice since you're guaranteed to get paid by the Social Security Administration for as long as you live, while most other sources of retirement funds aren't certain to last.
2. Bulk up your investment accounts
There's a limit to how much you can increase your income and maximize your Social Security checks by doing it. That's especially true since the Social Security calculates benefits based on average wages over 35 years, so raising your wages for just a short time isn't going to make a huge difference.
You have much more control over how big you can make your investment accounts, though.
By sacrificing to save as much as possible and investing wisely in assets likely to produce generous returns, you should be able to grow a large retirement nest egg -- especially if you start saving early. For many people, the amount of income your investments can produce will be bigger even than the maximum Social Security benefit ... if you make the right choices when it comes to retirement investing.
3. Develop alternative income sources in retirement
You don't have to give up earning income just because you've retired.
You can opt to work part-time or do some consulting in your field, if possible. You can also make real estate investments over your lifetime to earn rental income or benefit from property appreciation. And if you're interested in another guaranteed income source besides Social Security, you have the option to look for a job with a defined benefit pension.
These strategies can pay off and allow you to have a financially secure retirement even if your Social Security doesn't come anywhere close to the $4,194 maximum benefit available to the country's highest earners.
