Social Security Benefits

What is Social Security ?


Federal authorities oversee the Social Security program. Social Security is an earned benefit. Taxes put into a trust fund are used by the program to pay payments to qualifying individuals. A Social Security number is required when applying for jobs.

What is Social Security Benefits ?


Benefits from Social Security are payments paid to eligible retired adults, disabled individuals, and their spouses, children, and survivors. The Old-Age, Survivors, and Disability Insurance (OASDI) program, also known as Social Security in the United States, is a comprehensive federal benefits program created to provide a portion of replacement income for retired adults and their spouses, people who have lost a spouse or a qualifying ex-spouse, and people with disabilities. It also provides assistance to the beneficiaries' children under certain circumstances.

Family members of workers who have paid into Social Security are the only individuals who are legally permitted to receive benefits without doing so. Based on the qualifying worker's earnings history, nonworking spouses, ex-spouses, children, or parents may qualify for spousal, survivor, or children's benefits.

Non-citizens who legally reside and work in the United States contribute to Social Security and are entitled to benefits in the same ways as Americans. Payroll taxes can be used by undocumented workers to pay into Social Security, but they cannot get benefits.

How Does the Social Security Benefits Works ?


In 1935, President Franklin D. Roosevelt approved the first Social Security Act. The current law includes many social insurance and social welfare programs, including the payment of Social Security benefits, after a number of revisions. The Social Security Administration has established a defined set of criteria that are used to assess benefits.

Social Security and all of its benefits are paid for by payroll taxes collected in accordance with the Federal Insurance Contributions Act (FICA) or the Self Employed Contributions Act (SECA). The Social Security Trust Fund, which is really made up of two different funds, the Old-Age and Survivors Insurance (OASI) Trust Fund and the Disability Insurance Trust Fund, receives tax contributions from the Internal Revenue Service (IRS) and formally entrusts them to it.

If you are unable to work due to a handicap or after you retire, Social Security can be a source of income for you. In the event of your passing, it may also provide benefits to your spouse, children, or parents, who are your legal dependents.

You pay Social Security taxes while you are working. The trust fund that receives this tax money distributes benefits to:
  • The retired at the moment
  • To those who are handicapped
  • To the surviving spouses and kids of the deceased workers
  • You will accrue credits for each year you work to help you qualify for benefits when it's time for you to retire. The Social Security Administration (SSA) offers all available benefits.

Key Facts of Social Security Benefits


  • Benefits from Social Security offer qualified retired adults and disabled people, as well as their spouses, children, and survivors, a portion of a replacement income.
  • To be eligible for benefits, a person must contribute to the Social Security system during their working years and accumulate 40 credits.
  • A person's benefit amount is determined by their past wages, the year of their birth, and the age at which they first file for Social Security.
  • Benefits based on the job history of the working spouse may be available to spouses who do not work or who have not accrued the necessary amount of credits.
  • Depending on one's income and tax filing status, benefits may be taxed.

How Much is the Social Security Benefits ?


By contributing to the Social Security system during your working years, you become eligible for old age (or retirement) payments. A worker can earn up to four credits per year, with the requirement for full insurance being the accumulation of 40 quarters, or "credits," from insured pay. For 2023, a credit is given for every $1,640 in earnings (and $1,510 in), an amount that is yearly modified to account for inflation.

The maximum amount of earned income that is due to the Social Security payroll tax is determined by a payroll tax ceiling. The maximum on payroll taxes is $147,000 in 2022 (and increases to $160,200 in 2023).

The SSA tracks your earnings throughout the course of your career, indexes the total earnings for each year, and calculates your average indexed monthly earnings using the 35 highest-earning years. Your primary insurance amount (PIA), which is the monthly sum you can start receiving when you reach full retirement age, is then calculated using your AIME.

The full retirement age gradually rises for people born after 1938, starting at 65 and reaching 67 for those born after 1959. You can begin receiving Social Security retirement benefits at age 62, but the benefit's amount will be decreased to account for the fact that you'll likely be receiving it early and for a longer period of time.

The maximum monthly Social Security benefit for retirees is $3,345 in 2022 and increases to $3,627 in 2023. Your full retirement age, the SSA's estimated life expectancy for benefit calculations, rough estimates of your retirement benefits, real forecasts of your retirement benefits depending on your work history, and other information may all be found using the SSA's retirement calculators. The requirements for retired people with non-FICA or SECA-taxed wages are more complicated and will require additional assistance.

IMPORTANT :
If you wait to begin receiving benefits until you are 70 rather than 62, you will receive an additional 8% year, or 132% of your PIA for the rest of your life. The advances come to an end once you are 70.

Special Considerations


A taxpayer must pay taxes on their Social Security benefits if their income is higher than $25,000 for an individual taxpayer or $32,000 for a married couple filing jointly.

No one, regardless of income, pays taxes on more than 85% of their Social Security benefits. The fraction of benefits that are subject to taxation varies on income level. The majority of the time, disability benefits are not subject to taxes. Benefits for dependents or survivors are not included in your taxable income if your child receives them.

Who is Eligible for Social Security Benefits ?


Social Security benefits may be available to many persons who qualify for Supplemental Security Income (SSI). In actuality, SSI benefit applications are also Social Security benefit applications. Before granting Social Security payments, the SSA must get more information from the applicant.

Information on individuals who might be eligible for Social Security benefits is provided in the following sections.

You must be the following to be eligible for social security benefits as a worker :
  • Older than 62, handicapped, or blind.
  • Having enough work credits makes you "insured."
You must be a citizen of the United States or an alien who is legally resident in the country to be eligible to receive monthly Social Security benefits for applications made on or after December 1, 1996.

What Amount of Work is Required to be "Insured" ?


Work is measured by SSA in "work credits." Based on your yearly earnings, you are eligible to receive up to four work credits. Each year, as average income levels climb, the amount of earnings needed to qualify for a work credit also rises.

You must have accrued a minimum of one work credit and a maximum of 40 work credits between the ages of 21 and the year you turn 62 or become disabled in order to be eligible for the majority of benefits (such as retirement or payments based on blindness). Regardless of age, a minimum of six work credits is needed.

You must have worked for the required amount of time and recently enough in accordance with Social Security's regulations in order to be eligible for benefits based on a handicap other than blindness. Your age at the time you become disabled will determine how many work credits you need to qualify for disability payments. Typically, you must have 20 work credits from the last 10 years, counting from the year you became incapacitated. Younger employees, however, can be eligible with less credits. These are the guideline:

Before the age of 24 :
If you've accrued six work credits over the three years preceding the beginning of your disability, you might be eligible.

Age 24 to 31 :
If you receive credit for working for at least half the time between turning 21 and the time you become disabled, you might be eligible.

Over the age of 31 :
Generally speaking, you'll need to have the quantity of work credits indicated in the graph below. At least 20 of the credits must have been obtained in the ten years prior to your disability.

Born After 1929
Become Disabled
at Age

Work Credits
Needed

31 through 42

20

44

22

46

24

48

26

50

28

52

30

54

32

56

34

58

36

60

38

62 or older

40

Who is Eligible to Receive Benefits on Earnings Record ?


If you are 62 years of age or older, disabled or blind, and have enough work credits, you may be eligible to receive Social Security benefits based on your earnings history.

Family members who are entitled to benefits based on your employment history do not require work credits. They must be a U.S. citizen or an alien with legal presence in the country, nevertheless, if they submit an application on or after December 1, 1996. The family members listed below may be eligible for benefits based on your employment history.

Your spouse may be eligible if they meet the following criteria if you get retirement or disability benefits :
  • 62 years and older.
  • Aged 62 or older, divorced from you, and was wed to you for at least ten years before your divorce.
  • Being under 62 years old and taking care of a dependent (under 16 or under 22 years old who qualifies for benefits) on your job record.
If your divorced spouse was married to you for at least 10 years before the divorce and has been legally separated from you for at least 2 years, they may be eligible for benefits if you are age 62 or older, have enough work credits to receive Social Security benefits, but have not yet filed a claim.

If your surviving spouse meets the following criteria, he or she may be eligible :
  • 60 years or older
  • Older than 50 and impaired
  • Aged 60 or older (age 50 if incapacitated), divorced from you, and was married to you for at least ten years before your divorce.
  • Under 60, caring for a child (under 16 or under 22 who is disabled), and eligible for child benefits.
  • Divorced from you, younger than 60, and taking care of a dependent child on your record (under 16 or disabled before age 22).
Based on the worker's history, dependent parents who are 62 years or older may be eligible for benefits.

The following criteria may apply to unmarried offspring of disabled, retired, or deceased workers :
  • Under the age 18
  • Aged 18 to 19 and enrolled full-time in school (no higher than grade 12)
  • 18 years of age or older with a disability that began before the age of 22.
In some cases, we may also provide benefits to adopted children, stepchildren, grandchildren, and step grandchildren.

Types of Social Security Benefits


There are main types of benefits that the Social Security Administration offers :

1) Retirement Benefits :
SSA has the resources you need to get started, whether you need assistance determining when to retire or are prepared to begin the next phase of your life. There is no need to visit a location to calculate your benefits, apply for retirement, and monitor the status of your application.

2) Disability Benefits :
In the event of the unexpected, Social Security might be able to assist. The Social Security Administration (SSA) provides disability benefits to people who are unable to work due to a medical condition that is predicted to last at least a year or cause death. Learn how to manage your benefits and how Social Security can be of use to you.

3) Spousal Benefits :
Based on their spouse's employment history, spouses who didn't work or didn't accrue enough credits to be eligible for Social Security on their own can begin receiving benefits at age 62. A spouse's benefit will be lowered if they apply for benefits before to attaining full retirement age, much like when applying for benefits on their own record. The maximum spousal benefit is equal to half of the amount to which the spouse would otherwise be entitled at full retirement age.

4) Survivor Benefits :
When a loved one passes away, SSA is there to support you during this trying time. Widows, widowers, and the dependents of qualified workers receive survivors payments. The surviving spouse has the right to apply for a survivor's benefit as early as age 60 when their spouse passes away. If they apply before reaching their full retirement age, the benefit will be less. If their benefit is greater than the survivor's benefit, they may switch to it whenever they like beginning at age 62 and continuing through age 70.

5) Supplemental Security Income :
SSA is there for people who require assistance. People age 65 and older who are not disabled but have limited income and resources, as well as disabled adults and children, are supported by the Supplemental Security Income (SSI) program.

6) Medicare :
Our nation's health insurance program for those 65 and over is called Medicare. Medicare is also available to persons with impairments and those with chronic kidney failure who are under the age of 65. In order to guarantee that the public receives the help they require, Social Security collaborates with the Centers for Medicare and Medicaid Services.

How to Create a "My Social Security" Account ?


You might want to create a "my Social Security" account if you currently receive or will begin receiving Social Security benefits. The SSA offers you this online account as a service to help you manage and monitor your SSA benefits. Your Social Security record can also be amended.

By opening a my Social Security account, you can receive a customized estimate of your future Social Security benefits. These projections, which are based on your actual earning history, are usually the most accurate for people who are close to retirement. Your estimations may vary from year to year, particularly if your earnings history contains gaps or you have had a substantial pay change.

Social Security Earnings Limit Calculator


Making a my Social Security account online is the ideal way to get started with your future preparation. You may check your wages, obtain your Social Security Statement, and do much more with my Social Security from the convenience of your home or workplace.

Depending on your unique circumstances, you can also use a Social Security calculator to assist you choose the right age to begin receiving benefits. A selection of calculators to support your current needs or to aid with future planning.

These programs can be accurate but need access to the database that has your official earnings record. The quickest method to accomplish that is by opening a my Social Security account or login in to one you already have. The alternative is to respond to a series of inquiries to establish your identification.


How to Apply for Social Security Benefits ?


Online applications for Medicare, Disability, Retirement and Spouse's Benefits are all available.
  • You can submit an application online.
  • If you're unable to submit your application online, call 1-800-772-1213 (TTY 1-800-325-0778)
You can get in touch with the Federal Benefits Unit that serves your country of residence if you reside outside of the United States.

How to Check Application Status ?


You can track the progress of your application online after you submit it. To utilize this service, you will require your Social Security number and the application confirmation you received.

How to Find More SSA Help ?


Following are some options if you have particular inquiries concerning your Social Security benefits :

Frequently Asked Questions


What Happens to Social Security Benefits That Aren't Used?
Unused Social Security benefits are held in the trust accounts of the Social Security system and utilized to compensate those who are currently receiving benefits. If an eligible worker passes away prior to receiving benefits, donations are not returned and cannot be repaid.

Social Security Benefits Taxed in Which States?
Currently, 12 states, Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, Rhode Island, Utah, Vermont, and West Virginia, tax Social Security benefits.

When Does Social Security Benefits Recalculate?
Every year, Social Security benefits are reviewed. In other words, the Social Security Administration evaluates payments each year based on income from the preceding year. Your benefit is recalculated to reflect the increased benefit payable, which is retroactive to January of the year after you received the money, if the most recent year is one of your top earning years.

What Kind of Income Cuts Off Your Social Security Benefits?
Income that adds to your yearly earnings limit, which might reduce your benefit amount, include income received to you for working and net earnings from self-employment. Interest, annuities, capital gains, investment earnings, pensions, and other government benefits are examples of income that does not lower benefits.

If you never worked, do you still receive Social Security?
Family members of workers who have paid into Social Security are the only individuals who are legally permitted to receive benefits without doing so. Based on the qualifying worker's earnings history, nonworking spouses, ex-spouses, children, or parents may qualify for spousal, survivor, or children's benefits.