I Have No Interest in Receiving the Maximum Social Security Benefit. This Is Why.

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Upon reaching retirement age, Social Security becomes the primary source of income for a large number of elderly individuals. However, the amount of money recipients receive from the program varies widely.

Currently, the average monthly Social Security payment is $1,665. However, some seniors may be eligible for a much larger payout. Currently, the maximum monthly Social Security benefit is $4,194 per month. And that may be a target number for you.

I, on the other hand, am not particularly concerned with receiving the maximum $4,194 monthly benefit. This is why.

 

Social Security (4)

 

I’m putting more emphasis on my nest egg

Social Security faces a number of financial challenges that could lead to benefit reductions in the future. These reductions are not guaranteed. However, they are a possibility for which everyone should prepare.

As a result, I am not relying on a specific amount from Social Security, as I may be dissatisfied with the amount I receive even if I do everything possible to secure the highest possible benefit. Instead, I am making an effort to build my own nest egg and will rely on my savings as my primary source of income in retirement.

Since I am self-employed, I can contribute to a solo 401(k) (k). These plans have significantly higher annual contribution limits than traditional 401(k)s. This affords me numerous opportunities to save for retirement.

I’ve also made it a priority to aggressively invest my savings in stocks. Despite the fact that stocks can be volatile (and have been extremely volatile this year), I recognize that they are my best bet for growing my annual contributions over time.

In addition to my contributions to my solo 401(k), I also invest in a traditional brokerage account for retirement purposes. While I make it a priority to maximize my 401(k) first, any excess funds go there to bolster my overall retirement savings.

Regarding retirement planning, I prefer to concentrate on the aspects I can influence. Although I cannot control the performance of the stock market, I can motivate myself to earn more and live frugally to free up funds for my nest egg.

However, obtaining the maximum Social Security benefit may be beyond my control, especially if the maximum amount decreases substantially due to widespread benefit cuts. In addition, to receive the maximum Social Security benefit, you must delay filing until age 70. I hope to be able to accomplish this, but who knows?

My plan is to hope for the best when it comes to Social Security, but not rely too heavily on my benefits. This approach provides me with the most peace of mind.

Should you pursue the Social Security benefit maximum?

The maximum Social Security benefit is exceedingly difficult to obtain. To qualify, you must have a high income for many years and delay your claim until age 70, which is not possible for everyone.

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Rather than focusing on obtaining the maximum Social Security benefit, try to obtain as much money as possible. Nonetheless, increase your savings so that if Social Security cuts are enacted, your retirement plans will not be jeopardized.

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