Social Security

How does Social Security Work?

Throughout your career you pay a portion of your earnings into a trust fund by paying either Social Security/FICA or self-employment taxes, or sometimes both. Your employer, if any, contributes an equal amount. In return, you receive certain benefits that can provide income to you when you need it most--at retirement or if you suffer a long-term disability.

Your family members can receive benefits based on your earnings record, too. The amount of benefits that you and your family members receive depends on several factors, including your average lifetime earnings, your date of birth, and the type of benefit that you're applying for.

Your earnings and the taxes you pay are reported to the Social Security Administration (SSA) by your employer or, if you are self-employed, by the Internal Revenue Service. The SSA uses your Social Security number to track your earnings and your benefits.

You can estimate your retirement benefit online based on your actual earnings record using the Retirement Estimator calculator on the Social Security website, Other benefit calculators are also available that can help you estimate disability and survivor's benefits.

How do I become eligible for Social Security?

You earn credits that enable you to qualify for Social Security benefits when you work and pay Social Security/FICA or self-employment taxes. You can earn up to 4 credits per year, depending on the amount of income that you have. Most people must build up 40 credits (10 years of work) to be eligible for Social Security retirement benefits, but need fewer credits to be eligible for disability benefits or for their family members to be eligible for survivor's benefits.

What are the retirement benefits based on?

Several factors determine your benefit amount.

  • Average of the 35 highest yearly earnings over your working career
  • Your age when you start receiving Social Security retirement benefits

You can start receiving benefits as early as age 62, although your benefit will be reduced compared to your full retirement age. Full retirement age is age 66 if you were born between 1943 and 1954 and increases in two month increments thereafter, until it reaches age 67 for anyone born in 1960 or later.

You can also delay receiving benefits until age 70 and, if you do so, your subsequent monthly benefit could be increased as much as 8% per year for each year you delay receiving benefits.

Disability Benefits

You may be eligible for Social Security disability benefits if you become disabled. The SSA defines disability as a physical or mental condition severe enough to prevent a person from performing substantial work of any kind for at least a year after qualifying. This is a strict definition of disability so, if you're only temporarily disabled, don't expect to receive Social Security disability benefits. Because processing your claim may take some time, apply for disability benefits as soon as you realize that your disability will be long term.

Family Benefits

If you begin receiving retirement or disability benefits, your family members might also be eligible to receive benefits based on your earnings record. Eligible family members may include:

  • Your spouse age 62 or older, if married at least 1 year
  • Your former spouse age 62 or older, if you were married at least 10 years
  • Your spouse or former spouse at any age, if caring for your child who is under age 16 or disabled
  • Your children under age 18, if unmarried
  • Your children under age 19, if full-time students (through grade 12) or disabled
  • Your children older than 18, if severely disabled

Each family member may receive a benefit that is as much as 50 percent of your benefit. However, the amount that can be paid each month to a family is limited. The total benefit that your family can receive based on your earnings record is about 150 to 180 percent of your full retirement benefit amount. If the total family benefit exceeds this limit, each family member's benefit will be reduced proportionately. Your benefit won't be affected.

Survivors Benefit

Upon death, your family members may qualify for survivor's benefit. These family members include:

  • Your widow(er) or ex-spouse age 60 or older (or age 50 if disabled)
  • Your widow(er) or ex-spouse at any age, if caring for your child who is under 16 or disabled
  • Your children under 18, if unmarried
  • Your children under 19, if full time students through grade 12 or disabled
  • Your children older than 18, if severely disabled
  • Your parents, if they are dependent on you for at least half of their support
  • Your widow(er) or children may also receive a one time $255 death benefit immediately after you die

How Do I Apply For Social Security Benefits?

Social Security Administration suggests that you talk to a SSA representative a year before you plan to retire. They can then help you determine when you should apply and begin receiving benefits. If you are applying for disability or survivor benefits, apply as soon as you feel you will be eligible.

There are several ways you can apply for Social Security Benefits. They are:

  • Apply in person at your local Social Security office
  • Go on-line to the Social Security website (

When applying for Social Security, depending on what benefits you're applying for, you could be asked for certain documents such as:
•  Birth certificate
•  Verification of your Social Security number
•  Proof of citizenship
•  W-2 forms

These documents must be either original or certified copies. Any family member applying for benefits will also be asked for similar documents. SSA will let you know and help you get any documents you don't already have.

Frequently Asked Questions

1. Will there be any money left when I retire?

We all hear how Social Security will run out of money but most government officials believe that the government will not let that happen. There are a number of ways that the government can insure the viability of the Social Security program. These include:

  • Raising the eligibility age before benefits begin
  • Reduction of the benefits you will receive
  • Raising taxes
  • Raising the taxable-income limit for Social Security/FICA taxes. In 2014 the limit is $117,000.

Note, however, that the U. S. Treasury Department confirms that the Social Security program is financially viable with current resources until 2033.

2. At what age can I start receiving retirement benefits?

You can receive partial benefits as early as age 62. Full retirement benefits are based on your age:

  • If you were born prior to 1938, your full-eligibility age is 65
  • People born between 1938 - 1942 are eligible on a graduating scale that increases by two months per year
  • Persons born between 1943 - 1954 are eligible for full benefits at age 66
  • Those born between 1955 and 1960 are eligible based on a graduating scale that increases by two months per year, culminating in an eligibility age of 67 for those born in 1960 or later
  • If you were born after 1960, 67 is your age for full eligibility

3. Can I receive Social Security if I am still working?

The quick answer is "yes," but there are consequences you must be aware of. For example:

  • There are no negative impact on your benefits when you reach your full retirement age and you continue to work
  • If you work and receive benefits before retirement age, Social Security deducts $1 from your benefit payments for every $2 you earn above the annual limit. For 2014, that annual limit is $15,480.
  • In the year you reach full retirement age Social Security deducts $1 in benefits for every $3 you earn above a different limit, but they only count earnings before the month you reach your full retirement age. In 2014 that limit is $41,400.

4. How much money will I receive?

  • The amount that you receive will be based on the average of your highest 35 income generating years.

5. What happens if my spouse dies?

  • If both you and your spouse are receiving Social Security Benefits the surviving spouse will receive 100% of the greater amount.
  • Prorated amounts are paid to surviving spouses that have not yet reached retirement age

6. Can I collect more than one type of benefit at a time?

  • No. If you qualify for more than one type of Social Security benefit (e. g. Social Security retirement benefits and SSI) you will only receive the benefit that pays you the higher amount, not both.