Did you know you could potentially get a Social Security retirement check totaling $4,194 per month in 2022? Not very many retirees receive this much though, as the average benefit is just $1,657.
Many decisions you make throughout your life play a role in determining if you'll be eligible for the maximum benefit. But there's one key choice you could make as a retiree that makes it impossible to max out your monthly income. Here's what it is.
Doing this will put the maximum Social Security benefit out of reach
If you've reached the age when you become eligible for Social Security benefits, you'll be on track for the maximum monthly amount only if you've earned quite a bit of money over your career. You must have worked for at least 35 years and earned the maximum taxable wages in each one of them to potentially receive $4,194 per month.
The maximum taxable wage refers to the maximum income subject to Social Security tax. It exists to prevent very wealthy people from getting huge monthly benefits. It's $147,000 in 2022, and is the inflation-adjusted equivalent of that amount every year.
By the time you get near retirement age, it will be too late to go back and change the income you've made. Either you'll have sufficient earnings to max out your retirement benefits or you won't. But if you do have a 35-year history of earning a generous wage, you still have one more hurdle to overcome.
You must make the right choice about when to get your monthly benefit. If you can't do that, then you'll put the $4,194 per month benefit out of reach.
When do you need to claim Social Security to get the maximum benefit?
If you want the largest possible Social Security benefit, you're going to have to wait until the age of 70 to claim it. There is a smaller maximum monthly income for anyone who claims even a month prior to their 70th birthday -- even if they earned the taxable maximum wage or above over the course of a minimum 35-year career.
If you do not claim your Social Security checks at 70, you will get less money because you won't earn the maximum number of delayed retirement credits. These are available for each month you wait to start your payments after your full retirement age (which is between 66 and four months and age 67). Delayed retirement credits raise your monthly income by 2/3 of 1% per month. Missing out on even one month of them would make getting the highest available Social Security benefit an impossibility.
These delayed retirement credits don't just open the door to getting a $4,194 Social Security benefit if you've maxed out your taxable wages over your career. Any retiree can earn them and increase their own monthly payment. If you were on track for a $1,600 check at 67 and you waited until 70 to file for benefits, you'd earn three years of delayed retirement credits. You'd raise your own payment by 24% and end up with $1,984 per month instead.
Whether you're trying to earn the maximum $4,194 or simply trying to max out the retirement benefits you're eligible for based on your own work history, you should seriously think about waiting to claim Social Security until age 70 if getting the largest possible monthly payment is your goal.