The maximum monthly benefit that welfare recipients can receive in 2024 is $4,873. But make no mistake—most retirees receive much less money each month. In fact, the average retiree received just $1,915 per month in April.
You may want to do everything you can to get the maximum monthly Social Security benefit, but instead of dawdling in that regard, you might be better off focusing on building a solid nest egg for retirement.
The maximum social security benefit entitlement is difficult to achieve
To receive the maximum amount Social Security pays each month, you must do three things:
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Work for at least 35 years
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Earn the equivalent of the wage cap each year (this year that cap is $168,600).
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Postpone your Social Security application until age 70
You can force yourself to stay in the workforce long enough to build up a 35-year earnings history. And you can also force yourself to keep working to delay your retirement claim until your 70th birthday.
But the fact is that you won’t get Social Security’s highest monthly benefit if you don’t earn enough to receive it throughout your entire working career. It’s that simple. To some extent, pursuing the maximum benefit could prove to be a serious waste of your time and energy.
Focus on the things you may control
Your employers may only be willing to pay you a certain wage over the years. However, you can make a conscious decision not to spend your entire paycheck and instead put a large portion of it into your 401(k) or IRA plan. You can also invest your savings heavily in stocks during your working years to generate nice returns in your portfolio. Over time, you can build up tremendous savings.
If you save and invest $500 a month for 40 years and your portfolio earns an average annual return of 8%, slightly below the stock market average, you could have $1.5 million when you retire.
If you then decide to withdraw 4% of your savings each year in retirement, that’s an annual income of $60,000 – comparable to what Social Security would pay you if you were eligible for the maximum monthly benefit. Only, while it’s not within your power to earn that maximum benefit, you can definitely put money aside for retirement and make smart investments.
A huge pension payment in retirement would certainly be a nice thing. And working longer and developing skills to increase your income could be two effective ways to get such a benefit.
If you find that you’re not getting the highest Social Security benefit, don’t worry. If you play your cards right, you can secure enough income to enjoy your retirement to the fullest without having to factor those monthly benefits into your budget.
The $22,924 Social security bonus that most pensioners completely overlook
If you’re like most Americans, you’re a few years (or more) behind on your retirement savings. But a handful of little-known “Social Security secrets” could help boost your retirement income. For example: One simple trick could earn you up to $.22,924 more… every year! Once you know how to maximize your Social Security benefits, we believe you can retire with the security we all seek. Just click here to learn more about these strategies.
Watch the “Secrets of Social Security” ›
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Don’t chase the maximum pension. Instead, do this to retire a millionaire was originally published by The Motley Fool