The maximum monthly benefit for retired workers is currently $4,555. However, this monthly benefit amount increases annually to match the overall wage levels.
A recent survey found that only 53% of respondents agreed that they know how to maximize their Social Security monthly benefit.
This lack of knowledge could have serious consequences for retirement, as Social Security is a crucial source of income for retired workers. It is important for current workers to understand how to make the most of their future Social Security payments to their Social Security monthly benefit.
Annually, the benefits formula for Social Security is adjusted based on changes in the national average wage index, which measures changes in general wage levels. As wages generally increase, the maximum Social Security monthly benefit also increases.
Three tips to get the maximum monthly benefit of your Social Security;
- 35 years of Work History
In order to receive the maximum monthly benefit, one must have a work history of at least 35 years. Those with a shorter employment history will have zeroes factored into their average earnings, resulting in a lower monthly benefit.
- Earn more money over the taxable limit
The Social Security program is funded through payroll taxes, but not all income is taxed. The maximum taxable earnings limit increases each year based on the national average wage index. Currently, the limit is $160,200. Any income above this limit is not subject to Social Security taxes and does not factor into monthly benefit calculations, although according to the Social Security Administration only 6% exceed the taxable limit in a given year.
- Delaying Social Security benefits until the age of 70
Through delaying Social Security beyond FRA, workers can earn delayed retirement credits, which increase their monthly benefit by 8% per year until age 70. Starting Social Security at age 70 is recommended for those aiming to receive the maximum monthly benefit.
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Not everyone could receive the maximum Social Security monthly benefit.
In a USA Today article, there are many seniors who find it unrealistic to collect the maximum Social Security monthly benefit of $4,555 during retirement since most struggles to earn a high enough income to qualify for this amount. However, a comfortable retirement might be a possibility.
By saving and investing wisely, you can build a strong financial foundation to supplement your Social Security income. Additionally, if you haven’t saved enough, there are alternative options available to improve your financial situation.
READ MORE| Here’s How Retirees Can Get the Maximum Social Security Benefit of $4,555 Each Month
