Are you on track for the maximum Social Security benefit of $3,895? – Community News
Social Security

Are you on track for the maximum Social Security benefit of $3,895?

You will often hear that it is difficult, if not impossible, to retire from Social Security alone. But if you qualify for the maximum monthly benefit, you may be able to cover your bills well.

This year, the maximum monthly Social Security benefit comes in at an impressive $3,895. And while most seniors don’t qualify for it, here’s how to know if you’re the exception.

Social security card wrapped in bills.

Image source: Getty Images.

What does your lifetime earnings look like?

To qualify for the maximum monthly Social Security benefit, you must earn enough money each year to meet the wage cap. That limit changes every year. In 2021 it will be $142,800. Next year it will be $147,000.

Income above the wage cap is not subject to Social Security taxes. They are also not included in calculating benefits. But if you earn enough during your career to meet the wage cap for 35 years, then the maximum monthly Social Security benefit can be yours.

Why 35 years? The RSZ takes this into account when calculating your benefit. Specifically, it’s your 35 highest income years that fit that formula. As such, you may still qualify for the maximum monthly Social Security benefit if there are some years during your career when your earnings were lower.

When do you think you will be entitled to social security?

You may apply for Social Security benefits from age 62, but if you apply at that age, your monthly benefit will be reduced. Once you reach full retirement age (66, 67, or anywhere in between), you’ll be eligible for your full monthly benefit based on your income history.

If you want to get the maximum monthly Social Security benefit, you must defer your application until the age of 70. For every year that you wait to claim benefits after full retirement age, those payments will increase by 8%. Once you turn 70, that incentive will run out, but if you want that maximum benefit, you’ll have to wait until then.

Should You Worry About Getting the Maximum Monthly Social Security Benefit?

While you can make the decision to delay your Social Security application for as long as possible, you may not be in control of what your pay looks like throughout your career. As such, you may not get that maximum monthly benefit once you retire.

But that need not be a concern. First, if you work to increase your pay as much as possible during your career, you can get a higher benefit later on. Also, delaying your application until age 70 will still result in a more generous monthly payday for life.

At the same time, you can work on building retirement savings so that you have income to supplement your Social Security benefits. If you grow a large enough nest egg, you may have access to much more money than what the maximum monthly Social Security benefit would pay you.


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