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

Here’s what you need to do to end up with that maximum monthly Social Security payment of $4,194. Chances are you won’t quite get there, but you might still be able to increase your ultimate perks quite a bit, maybe even by 24% or more!

To understand how to qualify for this maximum benefit, know that for each of us, our benefits are calculated based on our earnings during the 35 years in which we earned the most (adjusted for inflation). You must therefore have worked for at least 35 years to have a chance of receiving this $4,194 per month.

In addition to having worked for (at least) 35 years, you will also need to have earned the maximum allowed in each of those years. The maximum is probably lower than you think: for each year, there is a maximum taxable income limit – a level of income above which you are not taxed for Social Security. This limit is $147,000 for 2022, and it tends to increase every year.

So to qualify for this maximum payout, you need to earn at least $147,000 in 2022 – and at least that amount in each of the other 34 years. You’ve probably already had at least a year with income below the maximum taxable income limit – but that alone doesn’t necessarily disqualify you. Be aware that for each year beyond age 35 that you work, your lowest earning year will be eliminated, leaving only the 35 years in which you earned the most.

Finally, you will also have to delay the start of the receipt of your benefits until the age of 70. Each of us has a “full retirement age” at which we can begin to receive the full benefits to which we are entitled based on our earnings history. For most of us, it’s 66 or 67. You can, however, start collecting at age 62, which means your benefits will be reduced (but you’ll get more checks overall).

Or, if you delay starting to draw past full retirement age, your benefits will increase by around 8% for each year you do, up to age 70.

So for this maximum benefit, you would need to earn at least the maximum taxable income limit for 35 years, then delay the start of your benefit receipt until age 70. Obviously, that just won’t happen for most of us.

But rest assured, there are still ways to increase your future Social Security benefits.

Even though it currently looks like you’ll only get, say, $2,000 a month in Social Security benefits when you retire, the strategies above can help you increase that amount.

For starters, if you can earn more in future years, such as getting a promotion, changing to a better paying job, and/or taking on side jobs, your benefits may increase. Also, if you’re earning more these days than in the past (on an inflation-adjusted basis), then if you can work a total of, say, 38 to 40 years, you’ll eliminate three to five . years of low income.

Delaying collecting your benefits until age 70 – if you can wait that long – will also increase your checks significantly, perhaps even 24%, if you delay age 67 to 70.

So while $4,194 is out of reach, you may be able to add hundreds of dollars to your monthly benefit, which can make a significant difference in the future.

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