In 2022, the maximum Social Security benefit is $4,194. This is a considerable sum, far greater than the benefit most people receive. And unsurprisingly, only a small number of retirees come close.

If you’re not claiming Social Security benefits this year, it’s actually possible that your own check could be higher than this year’s maximum benefit. Here’s why.

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The maximum benefit will be greater in the future

There’s a simple reason future retirees might actually see a check higher than the $4,194 2022 maximum benefit: the maximum benefit has historically increased over time.

For example, here are the maximum monthly Social Security payments over the past few years:

  • 2022: $4,194
  • 2021: $3,895
  • 2020: $3,790
  • 2019: $3,770
  • 2018: $3,698

As you can see, the maximum monthly check this year is $496 higher than the highest possible payment available just a few years ago. And if you go back even further to 1987, the maximum benefit was only $1,056. This is well below not only the current maximum benefit, but also the average benefit of $1,657 in 2022.

The maximum benefit increases each year because Social Security benefits naturally increase due to inflation and wage growth. Benefits are based on average wages, and people’s incomes are increasing all the time. Periodic cost-of-living adjustments (COLAs) built into Social Security also allow retirees to get increases in most years. This is necessary for benefits to maintain their purchasing power instead of losing ground due to inflation, but it also means that the maximum benefit is constantly increasing.

Because it is, it’s an undeniable fact that future retirees will see larger maximum benefits than this year’s $4,194. In fact, if you don’t retire for 20 or 30 years, it’s quite possible that $4,194 is closer to the medium most people receive, while the highest earners in the country will see a monthly payment well above that amount.

Does it matter if you get a bigger max benefit?

While you may be excited about getting a Social Security check above this year’s maximum benefit, it’s important to remember Why monthly retirement checks keep increasing. They increase because wages and prices also increase.

Due to inflation, it will cost a lot more to buy the same amount of goods and services in the future than it does today. So while your monthly check may be bigger, you won’t necessarily have more buying power. In fact, this maximum benefit of $1,056 in 1987 would amount to only $2,608 in 2022 dollars.

Ultimately, Social Security benefits are designed to replace only about 40% of pre-retirement wages for most people, and they replace even less for high earners. So while the maximum benefit may seem generous, most people simply cannot live comfortably on Social Security alone. Whether or not you’re on track for a benefit above this year’s maximum, you’ll need plenty of savings to cover costs that Social Security doesn’t cover and to have the secure retirement you deserve.

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