In 2022, a small number of retirees will receive a monthly check of Social Security benefits of $4,194. This is the largest check the Social Security Administration will send this year, and it’s a whopping $2,537 more than the average monthly benefit of $1,657 many retirees will receive this year.
If you want to get such a hefty check from Social Security, there are three steps you need to take to make that happen. This is what they are.
1. Have an employment history of at least 35 years
First and foremost you need to make sure you work for at least 35 years.
This is much longer than the minimum number of years you must work to be eligible for benefits. You can be eligible for benefits after only ten years of work, as long as you earn enough to reach your maximum work credits in each of those 10 years.
So why do you have to work so long? It’s because Social Security bases benefits on your average wage over the 35 years when your earnings were highest. And if you want the highest possible benefit, you need the highest possible average wage.
If you have a shorter employment history, years of $0 wages are included when calculating your average wage. The inclusion of $0 wages results in a lower average wage — lowering your benefit amount and making it impossible to get the largest checks the Social Security Administration provides.
2. Earn at least the wage limit for 35 years
During the 35 years of work that count when your benefits are calculated, you must keep your salary above a certain income threshold if you have the largest possible monthly Social Security Income.
This income limit is called the wage base limit. Look, the Social Security Administration limits the amount of wages people are taxed on each year. Any money you earn above the wage base limit is not taxed and is not included in the wages used in determining your career average.
This wage base cap is actually the reason there is a maximum Social Security benefit. If people paid taxes and got credit for all of them the wages they earned, very wealthy Americans earning millions a year would have a huge median wage and receive Social Security benefits totaling tens of thousands a month.
The wage base cap is $147,000 in 2022 changes every year based on inflation. If you earn at least the inflation-adjusted equivalent of that cap every year for 35 years, you’ll be making the most of the average wage on which the benefits are based and you’ll be on track to get the highest benefit possible.
3. Claiming benefits at age 70
Earning the wage base cap for 35 years will open the door to getting the highest monthly Social Security benefit available, but it is not enough on its own. That’s because you need to maximize not only your average wage, but your deferred pension credits.
Deferred retirement credits become available after you reach full retirement age without claiming benefits. For every month you delay your checkup past this point, until age 70, your Social Security benefit increases by two-thirds of 1%. Ultimately, up to age 70, you can earn an 8% benefit per year if you get the most credits.
So once you’ve earned a salary high enough to get the highest standard benefit possible based on your average wage, you’ll need to increase that benefit by waiting up to 70 years to start your checks.
By completing these three steps, you can score the maximum monthly Social Security benefit of $4,194 in 2022 — or whatever the maximum benefit may be when it comes time to retire.