Who Qualifies for Social Security Retirement Benefits? - dummies

Who Qualifies for Social Security Retirement Benefits?

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Social Security retirement benefits were created to help older Americans live in dignity and independence after a lifetime of work. To qualify for these benefits, you have to meet certain earnings requirements. The good news is that these requirements are in relatively easy reach for most healthy people who’ve worked for a number of years.

How you qualify for Social Security

Under the rules, you get credits toward eligibility by earning certain amounts of money. Most workers pick up the necessary credits without even thinking about it. Generally, 40 credits — which you can pick up in ten years of covered employment — does the trick. Covered employment means a job in which you and your employer pay Social Security taxes. (If you’re in business for yourself, you have to pay both the employer and employee shares.) These days, almost all jobs are covered.

People born before 1929 need fewer than 40 credits to qualify.

In 2012, Social Security awarded you one credit for every $1,130 in earnings, and you could get up to a maximum of four credits per year. (The dollar amount typically rises each year to reflect growth in wages.) For example, say you earned $4,520 in 2012. That means you earned a total of four credits ($1,130 x 4 = $4,520). Now, say you earned $100,000 in 2012. You still earned a total of four credits, because four credits is the yearly maximum no matter how much money you make.

Retirees become eligible for benefits on the first full month after their 62nd birthday — so if you turn 62 on July 19, you become eligible for benefits on August 1. The August payment would arrive in September, however, because Social Security pays with a one-month delay.

You don’t have to take your benefit when you turn 62. The longer you wait, the higher your monthly payment will be, until you reach 70. At that point, there’s no payoff in further delay.

Who can receive Social Security

If you qualify for retirement benefits, Social Security also may provide benefits to other family members under certain conditions, without reducing the benefits that go to you. Eligible dependents may include

  • A spouse age 62 or older.

  • A spouse of any age who cares for your dependent child who is younger than 16 or disabled.

    The SSA tends to follow state guidelines in terms of recognizing common-law marriages, although the rules leave some wiggle room for interpretation. As of 2012, the SSA does not give spousal benefits to partners in same-sex unions.

  • Your children.

    To qualify, children must fall into one of the following categories:

    • Younger than 18 and unmarried

    • Full-time students up to age 19 who haven’t yet completed high school and are unmarried

    • Age 18 or older and severely disabled with a disability that began before age 22

  • Grandchildren.

    If your grandchild depends on you financially, and the grandchild’s parents provide no support (for example, due to death or disability), the grandchild may qualify for Social Security benefits on your work record.

  • A former spouse(s).

    Your ex(es) may get benefits if the following apply:

    • You were married for at least 10 years.

    • You’ve been divorced for at least 2 years.

    • He or she is 62 or older, has not remarried, and is not eligible for a bigger benefit on anyone else’s work record.