To be eligible for Social Security benefits, you must accrue at least 40 Social Security credits. When you work and pay Social Security taxes, you accrue credits.
The quantity of benefits you receive is independent of the number of credits you have. The quantity of credits you have accrued is what we use to calculate your eligibility for Medicare, retirement or disability benefits, and survivor benefits for your family.
When planning for retirement, understanding your eligibility for Social Security benefits is crucial. This article dives into the requirements for qualifying for Social Security, specifically focusing on the number of years you need to work and pay into the system.
Eligibility for Social Security Retirement Benefits
To be eligible for Social Security retirement benefits, you must meet two main requirements:
1. Age Requirement: You must be at least 62 years old.
2. Work Requirement: You must have earned at least 40 Social Security credits.
Earning Social Security Credits
Social Security credits are earned through work and paying Social Security taxes. You can earn up to four credits per year, and the amount of earnings required to earn a credit changes each year. In 2023, you earn one credit for every $1,640 in covered earnings, and you need $6,560 to earn the maximum four credits.
Number of Years Needed to Earn 40 Credits
The number of years you need to work to earn 40 credits depends on your earnings. If you consistently earn enough to receive the maximum four credits each year, you can reach the 40-credit requirement in 10 years. However, if your earnings are lower, it may take longer.
Impact of Credits on Benefit Amount
While earning 40 credits is the minimum requirement for eligibility, it does not affect the amount of your benefits. The amount of your monthly benefit is determined by your average indexed monthly earnings (AIME), which is calculated based on your highest 35 years of earnings.
Additional Eligibility Factors
Apart from the work requirement, other factors can influence your eligibility for Social Security benefits:
- Disability: If you become disabled before reaching full retirement age, you may be eligible for disability benefits even if you haven’t earned 40 credits.
- Survivor Benefits: If your spouse or parent dies, you may be eligible for survivor benefits, even if you haven’t worked or paid into Social Security.
Tools for Checking Eligibility and Benefit Estimates
The Social Security Administration (SSA) provides online tools to help you check your eligibility and estimate your potential benefits:
- Benefits Planner: This tool allows you to enter your work history and estimate your retirement benefits based on different scenarios.
- My Social Security Account: This online account allows you to view your earnings history, estimate your benefits, and manage your Social Security settings.
Understanding the work requirement for Social Security eligibility is crucial for planning your retirement. While earning 40 credits is the minimum requirement, remember that it does not affect the amount of your benefits. Utilize the tools provided by the SSA to estimate your benefits and plan accordingly.
Number of Credits Needed for Retirement Benefits
You need 40 credits to be eligible for retirement.
How Credits Are Earned
Since 1978, you are able to obtain a maximum of four credits annually.
The amount of credits you receive depends on your annual income from self-employment and wages. Work for four credits over the course of the year, or work for less time to earn enough credits for all four.
The annual amount of earnings required to obtain a credit may vary. You will receive one Social Security and Medicare credit in 2024 for every $1,730 in annual covered earnings. To receive the maximum 4 credits for the year, your income must be $6,920.
It is possible that you will accrue more credits during your lifetime than what is required in order to qualify for benefits. These extra credits do not increase your benefit amount. When you receive benefits, the amount of your monthly payment is determined by the average of your earnings over the course of your working years rather than the total number of credits earned.
Read our publication, “How You Earn Credits,” for more information.
Here’s How Much Money You’ll Get From Social Security
How old do you have to be to receive Social Security benefits?
The Social Security Administration sets certain ages for retirement, which indicate how much of your benefit you will receive. If you retire at your full retirement age, you can expect to receive your full benefit. The earliest age you’re eligible to start collecting Social Security benefits is 62.
When can I start receiving Social Security benefits?
You can start receiving your Social Security retirement benefits as early as age 62. However, you are entitled to full benefits when you reach your full retirement age. If you delay taking your benefits from your full retirement age up to age 70, your benefit amount will increase.
What is the full retirement age for Social Security?
The full retirement age for Social Security ranges from 65 to 67. The SSA decides a person’s full retirement age based on when they were born. Eligibility age: The earliest age at which a person can begin taking Social Security retirement benefits. Typically this is age 62.
When do workers get Social Security retirement benefits?
Workers first become eligible to start Social Security retirement benefits at age 62. However, monthly payments are reduced by 25% or 30% if you claim them at this age, depending on your birth year.