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Introduction to Social Security Benefits

Last Updated November 3, 2014

By Retirement Dictionary Staff

The American Social Security program, as the name suggests, is a federal program in the United States supported by Americans who make contributions through payroll deduction. In some cases, the benefits extend to their dependents, beneficiaries, spouses and former spouses.

In order to be eligible to receive Social Security benefits, you must meet certain minimum requirements. This article provides a high level overview of the features and benefits.

Benefits Available

Most people are aware of the fact that Social Security provides retirement income for eligible individuals. However, the available benefits extend beyond that; they can help cover a significant amount of expenses and provide health and welfare benefits for you and your eligible family members. These benefits include:

  • Social Security income in the form of a pension payment,
  • Hospital and medical insurance for the aged, the disabled, and those with end-stage renal disease,
  • Survivors insurance
  • Disability insurance
  • Prescription drug benefits
  • Special Veterans benefits

Please contact us for a more detailed list of benefits

When designing and implementing plans for your retirement, the benefits that you can receive from the Social Security Administration should be taken into consideration, as they can represent a significant part of your retirement income.

What You Need to Qualify

Qualifying for Social Security benefits is not an automatic process. Instead, you must meet two basic requirements in order to be eligible to claim and receive benefits. These are as follows:

1.    You must have sufficient credits.

If you were born in 1929 or later, you must have earned at least 40 credits for the purposes of retirement benefits, which is equivalent to ten years of work during which you paid Social Security taxes. If you were born before 1929, the amount of credits that you need is reduced. For example, if you were born in 1928 you must have 39 credits instead of 40, and only 38 credits are needed if you were born in 1927.

For disability benefits, the number of credits that you will need depends on the age at which you become disabled. Generally, you also need 40 credits for disability benefits, and 20 of those credits must have been earned during the ten-year period ending with the year you become disabled. Individuals younger than 31 may need fewer credits.

Regardless of how much salary or wages you receive for the year, the annual Social Security Credit that you can earn is capped at four. For example, for the 2014 calendar year, you earn one credit for earnings of $1,200 and four credits for earnings of $4,800.

The number of credits needed for survivor benefits depends on the age at which you die. The younger you are at the time of death, the fewer credits are needed. The maximum amount of credits needed for survivor benefits is 40.

You never lose your credits even if you stop working. This allows you to add more credits if you return to the workforce.

2.    You must meet the age requirement.

In addition to having enough credits, you must be age 62 or older to qualify for Social Security benefits. An exception applies if you are disabled, allowing you to claim disability benefits before reaching age 62. In order to qualify for disability benefits, you must have a recognized disability and meet medical criteria.

The benefit amount for which you are eligible is based on the amount of earnings reported to the Social Security Administration by your employer. When computing your benefits, the Social Security Administration uses the highest 35 years of indexed earnings.

While employers try to ensure that the information is correct, mistakes can be made. As such, you should check your reported earnings to ensure that they are accurate.

You can check your record by reviewing your personal Social Security Statement, which will include your earnings for each year, estimated retirement income, survivor benefits and disability benefits. You can also view your Social Security Statement online at www.ssa.gov/myaccount/.

Benefits for Your Family

Social Security benefits are extended to your family, once you begin to receive benefits. The following family members are eligible to receive benefits:

  • Your spouse, if he/she is age 62 or older.
  • Your spouse if he/she is younger than age 62, providing he/she is taking care of a child who is entitled to benefits based on your Social Security record. The child must be age 16 of younger. The age requirement is waived for disabled children.
  • Your former spouse, if he/she is age 62 or older and was married to you for at least ten years, and
  • Your unmarried children who are age 18 (19 if they are full-time students who have not yet graduated from high school) and younger. Disabled children are not subject to any age limit if the disability began before age 22, and are eligible for benefits even  if married to someone who also has been disabled since childhood.

Please contact us for a complete list of family members who are eligible

Claiming Your Benefits

Generally, you can claim your Social Security benefits from age 62 to age 70, providing you have sufficient credits. You can start the process by contacting your local Social Security office. They can assist you with services and information including the following:

  • Your earnings records;
  • Applying  for Social Security benefits, Social Security income, hospital insurance protection, and extra help with Medicare prescription drug costs;
  • Enrolling for medical insurance;
  • Assistance with applying for food stamps; and
  • Providing you with information about you and your family’s rights and obligations under the law.

Use the Social Security Office Locator online to search and find your local Social Security

You can also apply online for benefits or call their toll-free telephone number, 1-800-772-1213.

Work with a Professional

Claiming your Social Security benefits may seem like an easy process. However, mistakes can be made that can cause your claims to be denied. Working with a professional who is experienced with Social Security claims can help to prevent such mistakes and ensure you get all of the benefits to which you and your family are entitled.