/Why Social Security Claims Will Likely Fall Short

Why Social Security Claims Will Likely Fall Short

For most people, benefits will fall far short of the maximum because their wages over their career will fall far short of the maximum taxable wage.

See, Social Security benefits are determined based on a recipient’s average wages during their 35 highest earning years (after their wages during their career are adjusted for inflation). But only wages up to the wage base limit count in determining each person’s average wage.

In order to get the maximum average wage, and thus the maximum benefit, you would need to earn at least the wage base limit each year. In 2022, the wage base limit is $147,000. That’s much more than most people earn. And you’d have to earn the inflation-adjusted equivalent of that amount for a full 35 years, which even fewer people do — even if some people hit the limit during a few years of their career.

For each year you fall short of earning the wage base limit, your benefits fall below the maximum. And the bigger the gap between your earnings and this limit, the further away from the maximum benefit your Social Security benefits will be.

Keep reading at Fox Business.