Working and paying Social Security taxes earns you credits toward qualifying for retirement benefits. The Social Security Administration, or SSA, tracks your credits and determines eligibility when you apply for benefits.
Earnings
Each $1,120 in earnings was equal to one credit as of 2010. A maximum of four credits may be earned each year. The SSA indicates that the dollar amount of earnings required for each credit increases slightly each year.
Credits
According to the SSA, if you were born in 1929 or later, you need 40 credits (10 years) of work to be eligible for benefits. Those born before 1929 need fewer credits.
Age
Full retirement age used to be 65. Amendments to Social Security in 1983 increased the full retirement age, beginning with people born after 1937. Now full retirement age is 67 for anyone born after 1959.
Reductions
Benefits may be taken as early as age 62, regardless of full retirement age, but at a reduced amount. For example, if your full retirement age is 67, at age 62 the reduction in benefits is 30 percent, at 64 it is 20 percent, and at 66 it is about 6.7 percent.
Applying
You can apply for Social Security retirement benefits online, by phone, or in person by appointment at your nearest Social Security office.
References
- Social Security Administration: How You Earn Credits
- Social Security Administration: The Full Retirement Age is Increasing
- Social Security Administration: Age to Receive Full Social Security Retirement Benefits
- Social Security Administration: How to Apply for Benefits
- Employee Benefit Research Institute. "Changes in Later-Than-Expected Retirement After the Great Recession." Accessed Oct. 15, 2020.
- Social Security Administration. "Getting Benefits While Working." Accessed Oct. 15, 2020.
- Social Security Administration. "Quarter of Coverage." Accessed Oct. 15, 2020.
- Social Security Administration. "Social Security Credits." Accessed Oct. 15, 2020
- Social Security Administration. "Full Retirement Age." Accessed Oct. 15, 2020.
- Social Security Administration. "Early or Late Retirement?" Accessed Oct. 15, 2020.
- Social Security Administration. "Delayed Retirement Credits." Accessed Oct. 15, 2020.
- Social Security Administration. "Exempt Amounts Under the Earnings Test." Accessed Oct. 15, 2020.
- Social Security Administration. "Fact Sheet Social Security." Accessed Oct. 15, 2020.
- Social Security Administration. "Benefits by Year of Birth." Accessed Oct. 15, 2020.
- Social Security Administration. "Income Taxes and Your Social Security Benefit." Accessed Oct. 15, 2020.
- Social Security. "Income Taxes on Social Security Benefits." Accessed Oct. 15, 2020.