The average Social Security benefit for retired workers is $1,658 per month, or $19,896 per year, for the average person.
The average person’s pre-retirement income is supposed to be replaced by Social Security, but it isn’t likely to cover all of your financial needs in retirement.
Many retirees receive a benefit that is far above the national average. Social Security benefits can go up to a maximum of $50,328 per year, or $4,194 per month.
This money would go a long way toward ensuring a secure retirement.
So, what’s the best way to get the most? In the event that you don’t qualify for the maximum Social Security benefit, here are some steps you can take to increase your retirement income.
How to Earn the Maximum Possible Benefit from Social Security
Three conditions must be met in order to receive the maximum Social Security benefit possible:
You’ve worked 35 years or more in jobs that are eligible for Social Security benefits. In order to calculate your Social Security benefit, your 35 highest-earning years are taken into account, and zeros are averaged in if you work fewer years.
In fact, many retired workers have worked for 40 years or more before retiring with little difficulty.
All 35 of your highest-earning years must have yielded income that is subject to Social Security taxation. All wage income above a certain threshold must be paid Social Security taxes, which are indexed for inflation over time.
There will be a taxable maximum of $147,000 in 2022 for Social Security, for example. It was $106,800 in 2010. It was $76,200 in 2000.
The Social Security Administration’s website lists previous years’ taxable maximums. The most straightforward way to put it is that you need to have earned a lot of money during the majority of your working years in order to get the maximum benefit.
When you turn 70, you can begin receiving Social Security benefits. A better than average benefit, but not the maximum, can be had simply by accumulating a large sum of money year after year.
After reaching full retirement age, which varies from person to person and year to year, the maximum benefit is $3,345 per month.
When it comes to Social Security, Americans can begin receiving benefits at any time between the age of 62 and 70, and the vast majority do so before they reach full retirement age.
However, your initial benefit increases in direct proportion to the length of time you wait. You must wait until you are 70 to begin receiving payments in order to maximize your benefits.
Your Social Security Benefit: How to Maximize Your Benefits
Achieving the maximum Social Security benefit is clearly out of reach for the majority of the population.
Due to health or other personal reasons, many people must retire before the age of 70 and even if they dramatically increase their earnings now, prior years where you earned less than the taxable maximum will prevent you from receiving the maximum benefit.
Social Security benefits can be significantly affected by even the most minor of changes. You can raise your lifetime average, for example, by starting a side business to earn extra money.
Each month you delay your retirement benefits results in an increase, so you don’t need to delay your retirement by much to have an impact.
Even if your Social Security benefit would be $2,000 per month at the full retirement age of 67, waiting three months would add an additional $40 to your monthly retirement income.
The bottom line is that maximizing your Social Security benefits isn’t absolutely necessary. Taking reasonable steps to increase your net worth can, however, be extremely beneficial to your financial well-being in retirement.
The $16,728 Social Security bonus most retirees completely overlook
When it comes to saving for your retirement, most Americans are a few years (or more) behind the curve. However, there are a few “Social Security secrets” that can help you get more money in your retirement.
You could earn as much as $16,728 more a year just by doing one simple trick. Retirement can be a worry-free experience if you know how to get the most out of your Social Security benefits.