You will often hear that you should not plan to retire alone with social security because your benefits will most likely not be enough to cover all your bills. But what if you are eligible for a monthly payment of $ 4,194?
It is the highest monthly benefit you can receive this year. And in that case, you look at an annual income of just over $ 50,000.
To be ready, it’s still a good idea to build your own nest egg on top Social Security. But you have to admit that a monthly benefit of $ 4,194 can go a long way.
But is it a monthly benefit you should expect to charge? Maybe – or maybe not. Here’s what it takes to get a $ 4,194 profit.
1. Has high earnings
The monthly social security benefit you can receive upon retirement depends on your earnings during your 35 highest paid years in the workforce. And you need a fairly high earnings to achieve the maximum monthly benefit of the program.
Each year, a wage cap is put in place that limits the amount of income that is subject to social security taxes. Right now, the ceiling is $ 147,000, but that changes from year to year.
Earnings beyond this point are not taxed for social security purposes, but they also do not count towards the calculation of your future benefit. But to be eligible for $ 4,194 a month, you must have a history of earnings that has met or exceeded the wage cap for at least 35 years.
2. Delay your application for social security
You are entitled to your full monthly social security benefit based on your earnings history when you reach full retirement ageor OFF. OFF starts at 66, 67 or somewhere in between, depending on when you were born.
For every year you delay your benefits beyond OFF, they grow by 8% until age 70. And if you want to win the maximum monthly benefit of $ 4,194, you will have to defer your Social Security application to your 70th birthday.
What if you’re not heading for a $ 4,194 monthly benefit?
To be clear, most social security recipients will does not be eligible to raise $ 4,194 per month. But if this is the case for you, do not sweat it.
First of all, if you are many decades inside your career and know that you will not qualify based on your earnings history, there really is not too much you can do about it. One cannot go back in time and earn a higher salary. But what you able to doing is to work on boosting your income going forward to get as generous benefits as possible.
In addition, if you want to get a nice social security salary, try to postpone your application until 70 years. If you do, it may require you to work longer, but you will be rewarded with a higher monthly benefit for life.
Finally, make an effort to save nicely up for retirement so you are not overly dependent on social security. Even if you manage to snatch $ 4,194 a month, you may still need more income than that to maintain the lifestyle you want when you stop working.
It can be nice to raise $ 4,194 a month from Social Security. But if it’s not in the cards, your next best bet is to do what you can to get a solid retirement income stream.
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