Many Americans are forced to retire solely on Social Security, leading to financial deficiencies. Millions or retirees are not receiving the maximum $4,873 per month; instead, they receive much less income. These $4,873 represent the maximum monthly benefit amount that Social Security will pay in 2024. Here, you will find what you need to end up with a monthly paycheck of $4,873.
The first step is to work for 35 years or more. It’s not necessary to have worked for 35 years to qualify for Social Security as such, but it is strictly necessary to have worked for 35 years to be eligible for the maximum monthly benefit amount from the Social Security program.
Now, the amount of money you are entitled to each month when you are retired will depend on the earnings you received for the 35 highest-paid years of your working life. $0 will be deducted from your personal benefit equation for each year without income records. Even one $0 could eliminate the possibility of that maximum monthly benefit.
Improve Your Income to Get the Maximum Retirement
The second step is to earn a high salary for 35 years. To qualify for the maximum monthly benefit from Social Security, you need 35 years of income where your salary is at or above the earnings cap. The cap changes each year and is currently $168,600. However, it’s a high amount; if you are a social worker with a 40-year work life and an approximate annual salary of $80,000, don’t expect to get the maximum monthly benefit from Social Security.
The third step is to delay your Social Security application until age 70. You are entitled to receive your full monthly Social Security benefit based on your personal earnings history when you reach full retirement age (FRA), which is around 66 to 67 years depending on your birth year.
Now, if you want to receive the maximum monthly benefit from Social Security, it is advisable to prepare to delay your benefit application until age 70. This will result in a permanent increase in your monthly payments and potentially put $4,873 per month in your pocket if you have a high enough salary history.
When the maximum monthly benefit is simply not achievable. Perhaps the idea of receiving $4,873 in your monthly Social Security check appeals to you, however, remember that almost all seniors do not earn anywhere near $4,873 per month. Your monthly benefit may also end up being much lower.
The Best Thing to Do if You’re Still Saving for Retirement
However, this is not something to worry about. First, there are steps you can take to increase your personal monthly benefit, even if you don’t come close to $4,873. For example, you can extend your career so you can wait until age 70 to apply for Social Security benefits. You can also try to increase your salary earnings during your career to get a higher monthly benefit and greater short-term financial flexibility.
If you think you are not close to the maximum monthly benefit from Social Security, it’s also a good idea to have a savings fund and consistently invest in an IRA or 401(k) account. If you generate significant savings, you can replace a higher monthly Social Security payment.
For example, if you could save $400 per month in an IRA or 401(k) plan for 35 years, with an average income, that amount can be favorable when claiming your Social Security. If your portfolio generates an annual return of around 8%, slightly below the stock market average, you could end up with around $827,000 in your name.
Having a $4,873 monthly Social Security benefit can be great. But if it’s not within reach, don’t think your retirement will be a failure. Instead, take action and start accumulating a good amount of savings and do everything you can to get the highest possible Social Security benefit based on your earnings in your working life.
