Who Qualifies for Social Security & Retirement?
- According to the Social Security Administration, 96 percent of American workers are eligible for Social Security benefits when they retire. As you pay into Social Security throughout your working years, you earn credits for working. Upon retiring, you need at least 40 credits to be eligible for Social Security benefits. It takes 10 years to earn 40 credits, but your credits remain on file for life, allowing you to enter and exit the workforce without being penalized.
- You cannot withdraw Social Security benefits until you are at least 62 years old. However, if you choose to wait longer to retire, your monthly benefits will increase over time. Those who retire at age 62 receive Social Security benefits that are 25 percent less than the benefits they would receive by waiting until the full retirement age. Retirees born in or after 1960 must wait until age 67 to receive full retirement benefits. Those born before 1960 can withdraw full benefits at an earlier age, between 66 and 67. Exact age for full benefits varies by birth year, and can be referenced at the Social Security Administration's website.
- Social Security benefits vary among recipients. The amount of your Social Security income is determined not only by when you choose to start receiving benefits, but also by the amount of income you earn over your lifetime. Each year that you work, the Social Security Administration will send you a statement of your estimated benefits at retirement based on your current income and work habits. Regardless of how much you earn during your lifetime, choosing to leave the workforce for any period of time could lower your benefits at retirement.
- Though your Social Security benefits are paid by the government, up to 85 percent of your earnings may be taxable. If you file a joint tax return with a spouse and make at least $32,000 per year, you are subject to a 50 percent taxation on benefits. If your income is at least $44,000, you may pay taxes on 85 percent of your Social Security income. Single tax filers face lower thresholds of $25,000 and $34,000 per year. According to the Social Security Administration, only one in three people receiving Social Security pay taxes on their benefits.
- To apply for Social Security benefits, visit your local Social Security Administration office. You can also apply online at socialsecurity.gov or by phone at 1-800-772-1213. Be sure to have you Social Security number and tax information handy. You will also need to provide your birth certificate, as well as proof of citizenship if you were born outside the United States. If you qualify for Social Security, benefits will be direct deposited into your bank account each month, so be prepared to supply your bank account and routing numbers.