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Part of the Series Understanding Social SecurityHow Social Security Is Organized
Benefits and Your Income
Benefits for Spouses
Benefits for Dependents, Survivors, After Divoce
Immigrants, Non-Citizens, Americans Abroad
Smart Benefits Strategies
The Social Security system provides millions of Americans with income supplements based on their eligibility for retirement, disability, or survivor benefits. A system of credits is used by the Social Security Administration (SSA) to determine eligibility for each of these benefits.
The individual's number of credits establishes whether minimum work requirements have been met, based on the amount of time that the person has spent in the workforce and, to a lesser extent, on their compensation during that time.
Social Security payments are adjusted annually for inflation. The increase for 2024 is 3.2%. The increase for 2023 was a much larger 8.7% due to the high rate of inflation.
A total of 40 credits is required to be eligible for retirement benefits. A single credit is earned over a quarter or three months, which means individuals earn four credits during a calendar year. Because you can’t earn more than four credits per year, it takes a minimum of 10 years in the workforce to accrue the credits necessary to apply for benefits.
The SSA assigns credits to your covered earnings. The numbers are adjusted annually for inflation. You earn one credit for every $1,640 in 2023. That increases to $1,730 in 2024.
Many workers earn all four annual credits in a short amount of time. Once you earn $6,560 in 2023 ($6,920 in 2024) in taxable income, you have acquired the maximum number of credits for the year.
The credit limit applies to everyone regardless of income. That levels the playing field somewhat. People who have very large incomes are not able to take advantage of benefits earlier than most others.
There are some situations in which benefits may be granted when the standard 40-credit threshold has not been met. One such scenario applies to the payment of disability benefits, known as Social Security Disability Insurance (SSDI).
In the SSDI program, the 40-credit rule holds for those ages 62 and older, but those who become disabled at a younger age may qualify with fewer credits.
Let's say you become disabled before age 24, you can apply for benefits with only six credits, as long as they were earned within the three years prior to your disability. For those who are between 24 and 31, eligible applicants must have credit for working half the number of years between 21 and the age at which they became disabled. This means that if you become disabled at age 29, you need to have worked for four years (for a total of 16 credits) within the eight years since you turned 21.
For those who are over the age of 31 and become disabled, credit requirements vary by age. This can range from as few as 20 credits up to the maximum requirement of 40. You can see the amounts for each age on the SSA’s website.
Unless you are legally blind, at least 20 of these credits must have been earned in the 10 years leading up to your disability.
The SSA’s definition of disabled is quite strict. You only qualify for Social Security disability benefits if you are severely disabled with a condition that entirely prevents your working and is expected to last a year or longer or result in your death.
Even if you have not met the 40-credit minimum, your family may be eligible to collect survivor benefits on your account in the event of your untimely death. Benefits may be payable to your children and your spouse who cares for them if you have acquired six credits within the three years preceding your death.
Depending on the type of benefits for which you are eligible, you can apply online at the SSA website, over the phone, or at your local Social Security office. The agency recommends making an appointment for an office visit.
The SSA website also has detailed information about credit requirements and an online calculator to help you estimate your potential benefit amount.
You get credits for Social Security benefits by working. When you're working, you're paying into the system through a payroll tax deduction. (If you run your own business, you pay the employer's share as well as your own.)
In general, you have to earn 40 credits to be eligible for benefits. That's 10 years of steady work.
Social Security survivor benefits are payments to the widow or widower or any dependents after the death of a benefits recipient. It's essentially a government life insurance program that protects the income of a deceased person's family.
The U.S. Social Security program has incredibly complicated rules. Luckily, the Social Security Administration website has features that help you understand your benefits, apply for them, and track them. Once you create an account, you'll have access to personalized information about your benefits.