In order to qualify for Retirement benefits under Social Security you need to work and pay Social Security taxes for a minimum of ten years. The ten year requirement does not mean that the ten years of work has to be continuous; Social Security breaks your work record up into “quarters of coverage” or “credits.”
You can earn up to four “credits” for Social Security each year that you work and pay Social Security taxes. In 2006 you need to earn a minimum of $970 per quarter before taxes to earn one credit. If you earn a minimum of $3,880 in 2006 you will receive a total of four credits towards your benefits.
To qualify for Retirement benefits you need a minimum of 40 credits or 10 years of work. It is okay if you have periods of unemployment on your work history as long as your total work adds up to 40 credits. You will not be eligible for Retirement benefits on your own record until you satisfy the 40 credit requirement.
After you have earned your 40 credits to qualify for Retirement benefits, your earnings are still counted. You will not earn any more credits past 40; however, Social Security looks at 35 years of your earnings to calculate the amount you will receive each month. The amount you receive is based on a number of factors. These factors include the annual amounts of your earnings, the age in which you start benefits, and any possible offsets for pensions you may receive where you did not pay Social Security taxes.
The earliest you can start Social Security Retirement benefits is age 62. If you file for benefits before your full retirement age you will receive a reduced amount based on your age. To learn how much you will receive each month for your Retirement benefits check your Social Security statement. There are three benefit amounts pertaining to Retirement on the statement; these amounts are the reduced amount at age 62 and the unreduced amount you will receive at your full retirement age. The final amount is what you could receive if you wait until age 70. By waiting until age 70 before taking your retirement benefits you earn what are called “delayed retirement credits” which can significantly boost your monthly benefit amount.
To determine your full retirement age use the following chart:
Birth Date ————- Full Benefit Age
1937 or prior ——– 65
1938 ——————-65 plus 2 months
1939 ——————-65 plus 4 months
1940 ——————-65 plus 6 months
1941 ——————-65 plus 8 months
1942 ——————-65 plus 10 months
1943 to 1954 ——– 66
1955 ——————-66 plus 2 months
1956 ——————-66 plus 4 months
1957 ——————-66 plus 6 months
1958 ——————-66 plus 8 months
1959 ——————-66 plus 10 months
1960 to present —– 67
You should be receiving a Social Security statement in the mail each year around three months prior to your birthday. If you are not receiving a statement make sure the IRS has your correct address as Social Security does not maintain an address for you until you start benefits. You can reach the IRS at 1-800-829-1040.
You can also request a Social Security Statement online from Social Security’s website at the following address: