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Social Security: Here’s why most retirees fall short of the maximum benefit

The average retiree’s benefit is over $2,000 below the maximum.

Social Security cards and money

Social Security benefits are based on the income you made during your working years.

Retirement: Home care is $100,000 per year

Why don’t I get the maximum benefit?

The maximum monthly Social Security benefit is $4,194, as of 2022. However, the average retiree gets $2,538 less than the maximum each month. That means, the average Social Security check for retirees is $1,657.

Most people get well below the monthly maximum simply because it is based on your average earnings during your working years.

Social Security is intended to replace about 40% of your pre-retirement income. However, the formula works with you. The SSA calculates the standard benefit by:

  • Collects data on wages earned each year
  • Adjusts the wages for inflation
  • Applies a formula that gives retirees benefits equaling a percentage of their average wages over their 35 highest-earning years

In order to get the $4,194 maximum benefit, you would have to make more than the wage base limit for 35 full years and wait until 70 to start claiming benefits. That is 8 years after you can innately start claiming your Social Security benefits. For most people, that just isn’t feasible. which is why the average benefit is much lower than the maximum.

One state is giving $1,000 in child tax credit to low income parents

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