In 2022, the Social Security Administration sends out retirement benefit checks totaling $4,194 per month to a small number of Americans. This is the maximum payment available from the SSA, and it provides quite a generous income compared to the average benefit of $1,657.
So, will you be on track for a $4,194 benefit, or will your payment fall short and come closer to the average? For most people, an annual Social Security income of $50,328 is likely a fantasy. And there are three key reasons why that's the case.
1. Your income is probably below the wage base limit
Social Security benefits are based on your average wages. To get the maximum $4,194 benefit, you must have the highest possible average wage.
The reason there is a maximum average wage -- and maximum benefit -- is because there's a cap on income that is subject to Social Security taxes and that is included in your benefits calculation. Each year, only income up to the wage base limit is used to determine your career-average wages that, in turn, determine retirement income.
The wage base limit is well above what most people earn. It's $147,000 in 2022 and was $142,800 in 2021. It's been the inflation-adjusted equivalent of this amount each year. Unless you earn this much, or more, you aren't going to get the maximum monthly Social Security benefit.
2. You probably won't come close to maxing out your income for a full 35 years
When Social Security calculates average wages, it uses a 35-year career history. When even one year of lower wages is included, it drags down your average wage below the maximum.
This doesn't mean that every single year when you worked you had to earn the wage base limit or more. If you worked for more than 35 years, it doesn't matter if you earned less in some of them. But it does mean that if you do not have at least 35 years when your earnings equaled or exceeded that key number, the maximum benefit will be out of reach.
3. Most people don't wait until 70 to get their benefits
Once you've earned the highest maximum average wage possible, this still doesn't mean that you will get $4,194 in monthly Social Security checks. You'll also need to wait until 70 to claim your first Social Security payment.
That's because you can earn delayed retirement credits that raise your monthly payment if you wait to start benefits, while you shrink it if you file for payments early. You can claim Social Security as early as 62, but the maximum benefit at that age is just $2,364 because of early filing penalties.
Since each year that you wait results in a bump-up in benefits, you must delay until 70 to max out your monthly income. After age 70, you can no longer raise your benefit amount, so there's no further advantage to delaying.
Most people don't wait until 70 to start their payments, though, and if you're one of the many who claim early, the max benefit will be out of reach.
For all of these reasons, a $4,194 monthly Social Security check probably isn't going to happen for you. You can sign in to your mySocialSecurity account to estimate what your own benefits will be and should plan accordingly when deciding how much supplementary savings you'll need.