How To Become Eligible for Social Security Benefits

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How To Become Eligible for Social Security Benefits

You can become eligible for social security benefits when you follow these rules

If you currently have fewer than the 40 credits needed to become fully insured for retirement benefits you won't be able to collect, but you can still earn credits and become fully insured if you work.

While you can still earn credits to be fully insured, Social Security will not pay benefits if your credits are insufficient.

This article will explain how to earn credits in order to be eligible for benefits. It also explains how the amount of work you do will affect your benefit amount.

To become fully insured, you first need to earn 40 credits

Each credit can be earned up to four times a year. Each credit is worth a specific amount of earnings. One credit will earn you $1,510 in 2022. You can work for four credits all year ($6,040) or earn enough to get all four credits in a shorter time.

After 10 years of hard work for someone else, you can earn 40 credits per year if you earn four credits each year. 

As average wages rise, so does the required earnings to earn one credit. Good news is even if you quit or change jobs, the credits you have earned will remain on your Social Security records.

Your highest 35-year earnings are the basis of your benefits. However, you must have at least 10 years work (40 credits) in order to be eligible for Social Security retirement benefits. But just so you know, Social Security bases base your benefit on your highest 35 year earnings.

Your benefit amount will be less if you don't have 35 years of earnings when you apply for retirement benefits and in the benefit calculation, your years without work are counted as zeroes.

Social Security calculates retirement benefits based on your lifetime earnings. To account for any changes in the average wage since the earnings were received they adjust your actual earnings or “index” them. They calculate your average monthly indexed earnings based on your 35 highest years of earnings which determines your benefit amount at full retirement age.  They use a formula for this, I've linked to extra information below so you know exactly where to find this information.

Your full retirement age depends on when you were born and is calculated as the maximum age that you can receive your entire retirement benefit. This amount can be affected by a variety of factors like if you begin receiving benefits before you reach full retirement age (as soon as age 62), or after you reach full retirement age (as late as age 70).  Your monthly benefits may be lower if you start collecting earlier. Your Social Security Statement will show you your personal monthly retirement benefit estimates for different start ages as well as your full retirement age.

Click HERE to access the Social Security Administration to find out more about how your benefits are calculated.


This is our disclosure:  This summary is for informational purposes only. This summary is not intended to be a recommendation for or give advice for any company or individual.

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