3 Steps to Claiming the Maximum Monthly Social Security Benefit of $4,194 | Personal finance

(Maurie Backman)

Social Security is not designed to fully replace your pre-retirement salary. If you have an average income, you can expect your benefits to replace about 40% of your old salary. If you have an above-average income, these benefits could replace even less of the income you are used to.

Still, it’s a good idea to get as much money from Social Security as possible. You could even try chasing the maximum monthly benefit the program will pay.

This number changes every year. But right now it’s $4,194. Multiply that by 12, and you’ve got over $50,000 in annual Social Security income snagging the maximum monthly benefit. But to achieve this, you will need to stick to these three steps.

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1. Work for 35 years (or more)

The monthly benefit you are entitled to from Social Security is calculated based on your earnings during your 35 best-earning years in the labor market. For the maximum monthly benefit to apply to you, you must have worked for at least 35 years.

2. Earn a high salary for at least 35 years

High earners often find that not all of their income is taken into account when calculating their social security benefits. This is because payroll taxes cease to be applied to a certain ceiling each year.

This year, salaries over $147,000 are not taxed for Social Security purposes, nor do they count toward your benefit calculation. But to get the maximum Social Security amount in retirement, you’ll need to earn at least the equivalent of the salary cap each year during your highest-earning 35 years in the workforce.

3. Delay your deposit as long as possible

Although you can enroll in Social Security as early as age 62, you cannot collect your full monthly benefit based on your salary history until you reach full retirement age, either. 66, 67 or somewhere in between, depending on your year of birth. But to get the maximum monthly benefit, you’ll have to delay filing until age 70. This is when deferred retirement credits stop accumulating.

What if you can’t get the maximum benefit?

If you’re not able to get the maximum monthly Social Security benefit, you’re in good company. Most seniors are not eligible to receive this maximum benefit because they cannot maintain high enough wages for 3 1/2 decades.

Also, delaying Social Security until age 70 can be difficult. Often this means having to postpone retirement, which for many is not ideal.

If you doubt your eligibility for the maximum monthly Social Security benefit, don’t worry. Instead, do what you can to increase your benefits. This could mean waiting until full retirement age to apply rather than rushing to enroll early. Or it could mean delaying your filing for a year to give your benefits a little boost without subjecting yourself to too much overtime in the job market.

At the same time, strive to build strong savings so you’re less reliant on Social Security to begin with. A monthly benefit of half the current maximum could do you more than good if you have a nest egg of $1 million to top it off.

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