Social Security – Earning Credits

When you work and pay into Social Security, you earn credits or what was previously called quarters.  The average worker earns about 4 credits per year in order to acquire the 40 credits required to be eligible for Social Security benefits at retirement.
The number of credits you need to qualify for benefits actually depends on the year you were born.  For example, if you were born in 1929 or later, you need 40 credits to qualify for eligibility.  If you were born before 1929, you would need fewer credits.  The minimum number of credits needed by an employee to qualify for benefits would be 24.  You would have had to be born around 1913 or earlier to qualify for the 24 credits.  So that eliminates pretty much the entire federal and postal workforce.
It is always a good idea to check your Social Security statement just to make sure your information is correct and that you have the 40 credits needed to qualify for Social Security benefits.  It actually only takes about 10 years in a Social Security covered employment to gain the 40 credits you need, 4 credits per year.  You can check your statement online.  It is simple, just set up your account with the Social Security Administration (SSA) and you can stay on top of your benefits and what your estimated payment may be at various ages.  You may also be surprised to learn about all of the different Social Security “claiming strategies” that exist – if you or your (current or former) spouse are eligible for Social Security speak to a financial professional who is an expert in your benefits and also how to maximize Social Security benefits.
It is estimated that the full retirement age will increase gradually until it reaches age 67.  Employees born after 1960, who start receiving their benefits at age 62, will experience a reduction of approximately 30% in their Social Security benefit. A rule of thumb is that early retirement will give you about the same total Social Security benefits over your lifetime, but in smaller amounts to take into account the longer period you will receive them.
Do your homework before you make any decisions that impact how you will live in retirement.

P. S.  Always Remember to Share What You Know.