Social Security: Frequently Asked Retirement Questions


Q. How are my retirement benefits calculated?

A. Social Security benefits are based on earnings averaged over most of a worker's lifetime. Your actual earnings are first adjusted or "indexed" to account for changes in average wages since the year the earnings were received. Then we calculate your average monthly indexed earnings during the 35 years in which you earned the most. We apply a formula to these earnings and arrive at your basic benefit, or "primary insurance amount" (PIA). This is the amount you would receive at your full retirement age, for most people, age 65. However, beginning with people born in 1938 or later, that age will gradually increase until it reaches 67 for people born after 1959.

Q. How long does a person need to work to become eligible for retirement benefits?

A. Everyone born in 1929 or later needs 40 Social Security credits to be eligible for retirement benefits. You can earn up to four credits per year, so you will need at least 10 years to become eligible for retirement benefits. During your working years, earnings covered by social security are posted to your Social Security record, and you earn credits based on those earnings. Each year the amount of earnings needed for a credit rises as average earnings levels rise. In 2009, you receive one credit for each $1,090 of earnings, up to the maximum of four credits per year. For 2008, you receive one credit for each $1,050 of earnings. If you become disabled or die before age 62, the number of credits needed depends on your age at the time you die or become disabled. A minimum of 6 credits is required regardless of your age.

Q. What is the maximum Social Security retirement benefit?

A. The maximum benefit depends on the age at which a worker chooses to retire. The amount for 2009 for a person retiring at full retirement age (66) is $2,323. This is based on earnings at the maximum taxable amount for every year after age 21.

Q. What age can I begin receiving full retirement benefits?

A. Full-retirement age has been 65 for many years. However, beginning with people born in 1938 or later, that age will gradually increase until it reaches 67 for people born after 1959.

Q. If I retire at age 62 will I be eligible for Medicare at that time?

A. No. Medicare benefits based on retirement do not begin until a person is age 65. If you retire at age 62, you may be able to continue to have medical insurance coverage through your employer or purchase it from a private insurance company until you turn age 65 and become eligible for Medicare.

Q. Can I receive Social Security benefits and Unemployment Insurance benefits at the same time?

A. Unemployment Insurance benefits are not counted under the Social Security annual earnings test and so do not affect your receipt of Social Security benefits. However, the unemployment benefit amount of an individual may be reduced by the receipt of a pension or other retirement income, including Social Security and Railroad Retirement benefits. You may wish to contact your state unemployment office for information on how your state applies the reduction.

Q. Will a combined husband and wife's benefits be reduced because of marriage?

A. When each member of a married couple works in employment covered under Social Security and they meet all other eligibility requirements to receive Social Security retirement benefits, their lifetime earnings are calculated independently to determine their Social Security benefit amounts. Therefore, each spouse receives a monthly benefit amount based on his or her own earnings. Couples are not penalized simply because they are married. If one member of the couple earned low wages or failed to earn enough Social Security credits (40) to be insured for retirement benefits, he or she may be eligible to receive benefits as a spouse.

Q. How can I find out about my pension benefits under private retirement plans?

A. Social Security keeps a database of individuals who have been identified by the Internal Revenue Service as having qualified for pension benefits under private retirement plans. This database is maintained by SSA under the 1974 Employee Retirement Income Security Act (ERISA) which was enacted to protect the pension benefit right of workers. Under the provisions of ERISA, SSA notifies claimants applying for Social Security benefits of any information SSA has on file about their vested pension benefits or those of the deceased number holder. Also under the provisions of ERISA, SSA can provide, upon request, any information there is on file about a person's vested pension benefits.

To request information on a private retirement plans, send a written request to:

OCO Office of Earnings Operations
Attention: ERISA Correspondence Group
P.O. Box 33007
Baltimore, MD 21290-3307

Reproduced from Social Security Online, 2009

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