Q. How does Social Security work?
A. Social Security is a “pay as you work” insurance plan intended to supplement any other retirement plan you have (e.g., savings, pension). As you work throughout your lifetime, Social Security taxes are taken out of your paycheck. There are two types of Social Security benefits — retirement and disability. There are various timing considerations when applying for social security benefits, depending on the type and amount of benefit you require.
Q. What are Social Security Credits?
A. Credits are the “building blocks” the Social Security Administration (SSA) uses to find out whether you have the minimum amount of covered work to qualify for each type of Social Security benefits. If you stop working before you have enough credits to qualify for benefits, your credits will stay on your record. If you return to work later on, you can add more credits so that you can qualify. No benefits can be paid if you do not have enough credits. Please see the video above for more details.
Q. How are Social Security Credits Earned?
A. When you work and pay Social Security taxes, you earn up to a maximum of four “credits” for each year. The way you earn a credit has changed over the years.
- Before 1978, employers reported your earnings every 3 months and we called credits “quarters of coverage,” or QCs. Back then, you got a QC or credit if you earned at least $50 in a 3-month calendar quarter.
- In 1978, employers started reporting your earnings just once a year. Credits are now based on your total wages and self-employment income during the year, no matter when you did the actual work. You might work all year to earn four credits, or you might earn enough for all four in a much shorter length of time.
- The amount of earnings it takes to earn a credit has changed since 1978. In the year 2014, you must earn $1,200 in covered earnings to get one Social Security or Medicare work credit and $4,800 to get the maximum four credits for the year. In the year 2015, you will need to earn $1,220 in covered earnings to get one Social Security or Medicare work credit and $4,880 to get the maximum four credits for the year.
Note: You do not earn credits for pension payments or for interest or dividends on savings and investments. You do not pay Social Security tax on that kind of income.
During your lifetime, you probably will earn more credits than the minimum number you need to be eligible for benefits. These extra credits do not increase your benefit amount. Your average earnings over your working years determine how much your monthly payment will be.
Q. Who is eligible to collect Social Security?
A. To qualify for Social Security retirement benefits, you need to earn at least 40 Social Security credits. The number of work credits you need to get retirement benefits depends on your date of birth.
- If you were born in 1929 or later, you need 40 credits (10 years of work).
- People born before 1929 need fewer than 40 credits (39 credits if born in 1928; 38 credits if born in 1927; etc.)
You can find additional information about retirement benefits in the SSA’s Retirement Planner.
Q. When can I begin collecting Social Security benefits?
A. You may claim early benefits starting at age 62, but they will not be the full benefits you would receive by waiting for your full retirement age. The full retirement age (FRA) is 65-67, depending on when you were born. For those born before 1938, the age is 65 and for those born in 1938 or later, the FRA gradually increases by monthly increments. If you were born in 1960 or later, your FRA is 67. To determine your retirement age, visit the Social Security website here.
Q. How do I apply for Social Security benefits?
A. Social Security benefits are not paid automatically. You must fill out forms and provide certain documentation such as your birth certificate, Social Security card, etc. You should apply four months before you want to being receiving your benefits. You can apply online, visit your local Social Security office, or call 1-800-772-1213 to get started.
Q. How much will I receive in Social Security benefits?
A. Because the system is based on how much you put into it, the benefits you receive are dependent on factors such as how long you’ve been in the workforce, how much you earned and the age at which you decide to begin receiving your benefits. If you claim your benefits earlier (i.e. at age 62), they will be reduced by the number of months between the time you claim your early benefits and your FRA. This reduced amount will be your permanent monthly payment (meaning it won’t increase when you hit your FRA), and could mean a maximum of a 25% reduction from your full benefit amount. Spouses and ex-spouses may also collect up to 50% of their spouse’s (or ex-spouse’s) benefits. You can use the online Retirement Estimator to get immediate and personalized retirement benefit estimates to help you plan for your retirement.
Q. How can I maximize my benefits when planning for Social Security and retirement?
A. Because the system is based upon the top 35 years of your earning career, you should try and earn as much as you can. Another way to maximize benefits is to wait until you reach your full retirement age before claiming them.
Q. Can I collect Social Security benefits if I am still working?
A. Yes, you can continue to work while you are collecting your benefit, but your monthly benefit amount could initially be reduced, depending on the amount of income you earn between age 62 and your FRA. Once you reach your FRA, your benefits will no longer be reduced if you continue to work.
Q. Are my Social Security benefits taxed?
A. A portion of Social Security benefits is subject to taxation depending on your income. Your income — including beneﬁts, dividends, distributions, interest, and employment — will determine how your beneﬁts are taxed.
Q. I heard Social Security going bankrupt–is this true and how does this affect my benefits?
A. Social Security’s Trust Funds still have plenty of reserves. At the end of last year, the combined Social Security Trust Funds held almost $2.8 trillion in assets, and they continue to grow. For more details, please read the article, “Is Social Security Going Bankrupt?” on our blog.
Q. How does the spousal benefit work?
A. As a spouse, you can claim a Social Security benefit based on your own earnings record, or you can collect a spousal benefit that will provide you 50% of the amount of your spouse’s Social Security benefit as calculated at their FRA. You are automatically entitled to receive the benefit that provides you the higher monthly amount; either a benefit based on your own earnings, or the spousal benefit. Even if you have never worked, under Social Security, you may be able to get spouse’s retirement benefits if you are at least 62 years of age and your spouse is receiving retirement or disability benefits.
Q. When can I start receiving a spousal benefit?
A. If you have reached your full retirement age (FRA), you can choose to receive only your spouse’s benefits and continue accruing delayed retirement credits on your own Social Security record. You could then file for your own benefits at a later date and receive a higher monthly benefit based on the effect of delayed retirement credits. However, a spouse cannot elect to receive spousal benefits below his/her retirement age and later switch to her own benefits.
Spousal benefits are reduced for those who file before their own FRA. For example, a spouse whose FRA is 66 could receive 35 percent of the worker’s unreduced benefit at age 62. The amount of the benefit increases at later ages up to the maximum of 50 percent at the FRA.
One exception: if a spouse is taking care of a child who is under age 16 or disabled and gets Social Security benefits on your record, your spouse gets full benefits, regardless of age.
Q. Can I file for spousal benefits if my spouse (the higher earner) isn’t yet at the full retirement age? If so, how much will my spousal benefits be reduced?
A. Assuming your spouse has already filed for benefits and your full retirement benefit is less than 50% of your spouse’s full benefit, you can file for the spouse’s benefits even though your spouse is not yet at the FRA. The amount of reduction is based on your age at the time you claim the benefit.
Q. Can I file for spousal benefits if my spouse isn’t receiving Social Security?
A. The answer is no. However, if the higher-earning spouse wants to continue delaying taking benefits past his or her FRA, he or she could do what is called a file-and-suspend.
Here’s how the “file-and-suspend” works:
1. The higher-earning spouse files for benefits at his FRA but immediately files a notice to suspend benefits.
2. The lower-earning spouse elects to receive spousal benefits 3. The higher-earning spouse continues to accrue higher payments for whatever point he elects to begin receiving benefits.
Q. Can my wife start collecting based on my account at age 62 and then switch to her own account at age 66?
A. No, it’s not possible to switch if she files on her own account before her full retirement age.
Q. If my wife (age 62) elects early retirement and collects Social Security on her own account, will her spousal benefit be reduced when I retire in two years, at 66, and begin collecting benefits then?
A. Social Security will pay a person’s own benefit first, before paying the spouse’s benefit. Your wife will not receive the full spouse’s rate because of her own benefit level, which is reduced as a result of filing early. The Social Security Administration will add the spousal benefit to her own benefit to arrive at her new, higher benefit amount.
Q. Can my wife receive spousal benefits once I reach full retirement age even though she will continue to work?
A. If your wife’s full Social Security benefit is less than 50 percent of your full benefit, she may be eligible for spousal benefits on your record (assuming that you already have filed for benefits). Since she is still working, there is a limit on how much she can earn and collect all benefits payable.
Q. My wife and I both just turned 66 and both decided to wait till 70 to collect. If the lower earner elects to receive spousal benefits and delays collecting his own benefit until 70, would this spousal benefit reduce his benefit? Do I have to file and suspend or do I do nothing but file for the spousal benefit?
A. Yes, you can file solely for the Spousal Benefit since you indicate that your wife has already filed and suspended – you can then both file for your own retirement benefits at age 70. You don’t need to (and should not) file and suspend – only file for the Spousal Benefit at this time. Also – your decision to file for the Spousal Benefit would have no impact on your future retirement benefit (or your wife’s) since you both are past your Full Retirement age (FRA) of 66.
Q. How are disability credits calculated?
The number of work credits needed for disability benefits depends on your age when you become disabled. Generally you need 40 credits, 20 of which were earned in the last 10 years ending with the year you become disabled. However, younger workers may qualify with fewer credits.
The rules are as follows:
- Before age 24–You may qualify if you have 6 credits earned in the 3-year period ending when your disability starts.
- Age 24 to 31–You may qualify if you have credit for working half the time between age 21 and the time you become disabled. For example, if you become disabled at age 27, you would need credit for 3 years of work (12 credits) out of the past 6 years (between ages 21 and 27).
- Age 31 or older–In general, you need to have the number of work credits shown in the chart below.
Unless you are blind, you must have earned at least 20 of the credits in the 10 years immediately before you became disabled.
-You may only claim one type of Social Security benefit. If you choose to accept the disability Social Security plan, you may not receive Social Security retirement benefits and vice-versa.
-Different rules apply for farm laborers, government employees, military, non-profit employees, and household workers.
You can find additional information about disability benefits in SSA’s Disability Planner.
Q. How do I apply for Social Security disability benefits?
A. Social Security offers an online disability application Applying online for disability benefits offers several advantages:
- You can start your disability claim immediately. There is no need to wait for an appointment;
- You can apply from the convenience of your home, or on any computer; and
- You can avoid trips to a Social Security office, saving you time and money.
Other ways to apply:
- Call 1-800-772-1213 (TTY 1-800-325-0778), Monday through Friday from7 a.m. to 7 p.m.; or
- Contact your local Social Security office.
Retirement Benefits for Widows and Widowers
Q. What is the survivor benefit?
A. When a spouse dies, the survivor is entitled to receive the greater of his or her own benefit or 100 percent of the spouse’s benefit, including any cost-of-living increases earned along the way.
Q. How many credits do you need for survivor benefits?
A. The number of credits you need to have family members be eligible for survivors benefits depends on your age when you die. The younger you are, the fewer credits you need, but nobody needs more than 40 credits (10 years of work).
Under a special rule, we can pay benefits to your children and your spouse who is caring for the children even if you don’t have the number of credits needed. They can get benefits if you have credits for one and one-half year’s work (6 credits) in the three years just before your death.
Note: If you are already receiving retirement or disability benefits at the time of your death, we will pay your survivors based on that entitlement. We will not have to determine your credits again.
You can find additional information about survivors benefits in SSA’s Survivors Planner.
Q. At what age should I apply for the survivor benefit?
A. Widows and widowers can begin receiving Social Security benefits at age 60, or at age 50 if they are disabled. And they can take a reduced benefit on one record and later switch to a full benefit on the other record. For example, a woman could take a reduced widow’s benefit at 60 or 62 and then switch to her full retirement benefit when she reaches FRA. The rules vary depending on the situation, so you should talk to a Social Security representative about the options available to you.
Q. Can a widower receive his late spouse’s benefit if the spouse’s benefit was tied to a spouse from an earlier marriage?
A. No. Your potential entitlement to a widower’s benefit is limited to your spouse’s Social Security record only. The Social Security rules don’t permit you to file for a benefit based on the work record of a spouse from an earlier marriage.
Q. How do I apply for a survivor benefit?
A. If you were already receiving a spousal benefit, report the spouse’s death to the Social Security Administration, and they will change your payments to survivors benefits. If you were receiving benefits based on your own work, you might be eligible for a higher survivor benefits, depending on your spouse’s work record. You would need to complete an application to switch to survivor’s benefits, and supply an original or certified copy of the death certificate to the Social Security Administration.
Q. Can I file for spousal or survivor benefits from a divorced spouse?
A. Yes, Social Security’s rules require that you are currently single, and have been married to your ex at least ten years; at least 62 years old, which is the minimum Social Security eligibility age; and not already receiving a benefit greater than the divorced spouse’s benefit.
Retirement Benefits for Divorcees
Q. Does the spousal benefit still apply to divorced people?
A. Yes, as long as you:
- are age 62 or older;
- were married for at least 10 years;
- have been divorced for at least two years; • ex-spouse is entitled to Social Security retirement or disability benefits; • benefit that you are entitled to receive based on your own work is less than the benefit you would receive based on your ex-spouse’s work; • aren’t currently married to another person (You can collect on a deceased ex-spouse’s record if your remarriage occurred after you reached age 60.) Read more here.
Q. What is the maximum amount of Social Security benefits you can receive based on an ex-spouse’s record?
A. At age 62, the divorced spouse is entitled to between 32 1/2% and 35 5/6% of their ex-spouse’s retirement benefit depending on the divorced spouse’s full retirement age. At FRA, a divorced spouse in entitled to 50% of what your ex-spouse would get at their full retirement age. If the divorced spouse is receiving benefits on his/her own work record, this spouse would only receive the benefit amount from the ex-spouse if it is higher, not both.
Q. If I get remarried, how long do I have to wait before I can file an application or spousal benefits based on my new spouses record?
A. You must be married for at least one year to a new spouse before you can file an application for spousal benefits based on their record.
Q. Does your ex-spouse have to file for their own social security benefits for you to be eligible to receive a benefit based on their record?
A. No, but they have to be eligible for those benefits. (They must be at least age 62, the earliest age you become eligible for your social security retirement benefits.)
Q. If an ex-spouse collects benefits based on your record, does it reduce your benefits or your current family’s benefits?
Q. If you file early, can you take an ex-spouse benefit and then switch to your own benefit when you reach full retirement age?
Q. If your ex-spouse is younger than you, can you collect your own benefit first and then switch to collecting on theirs?
A. Yes, if your ex-spouse is younger than you, you can collect your own benefit first (because they have not yet reached age 62 so you are not yet eligible to collect on theirs) and then switch to collecting on theirs once you become eligible for theirs (which would be when they reach age 62.)