Eligibility for Social Security Retirement Benefits

When determining retirement benefits eligibility, there are several prerequisites. However, there are only a few Social Security retirement requirements that will influence eligibility for receiving retirement benefits.

However, these requirements are influential, nonetheless, and can even affect the amount of benefits retirees can receive. The Social Security Administration (SSA) bases eligibility on credits earned over time and full retirement age requirements. Furthermore, there are additional eligibility parameters that affect Social Security benefits when workers retire outside of the Social Security requirement age, whether early or delayed.

In the U.S., the standard Social Security full retirement age is 67. However, the Social Security requirement age varies for workers born before 1960. Workers born prior to 1960 will find their exact legal retirement age below. Still, though, the age of retirement changes for workers who opt for early or delayed retirement. While early retirement is an appealing option, it comes at a price. Retiring early or late will influence the amount of benefits you collect. Workers close to retirement should make sure they get information on retirement eligibility, including how old retirees must be and how long they must work to meet full retirement eligibility minimums. After reading through the sections below, workers will understand the advantages and disadvantage of alternative retirement options such as early and delayed retirement.

How many years do I have to work to collect Social Security retirement benefits?

Social Security retirement benefits eligibility terms stipulate that before a retiree can collect Social Security benefits, he or she must work for 10 years in a position that deducts Social Security taxes from the worker’s paycheck. Even if a retiree is of Social Security full retirement age, he or she may not have met these eligibility standards.

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If an individual does not have a minimum of 40 credits, Social Security benefits will not be available. Because an individual can only earn four credits per year, it takes a minimum of 10 years to accrue this minimum limit required to earn benefits. Self-employed workers can also collect retirement if they filed taxes as a business and paid into the Social Security tax for a minimum of 10 years.

Social Security Retirement Credit Requirements

Social Security retirement credits compile as the SSA collects taxes via payroll deductions. Below is a breakdown of Social Security retirement requirements for credits:

  • Each year, a worker can earn up to four credits.
  • Social Security benefits require a minimum of 40 credits throughout the lifetime of employment.
  • Thus, the minimum time one could earn these credits is 10 years.

How Credits Are Calculated Until Social Security Retirement Age

Social Security retirement requirements make it so that you must work to receive benefits. When you decide to retire at the Social Security retirement age, you will no longer pay into Social Security taxes. Any funds you paid to the SSA collected at a fluctuating rate over the course of the lifetime of your employment. An example of the rate at which credits are earned follows. Note that this is an example and may not reflect the values for the current year because inflation is taken into consideration when determining credit values.

  • $1,320 of annual earned income from which Social Security tax was withheld yields one credit
  • $2,640 of annual earned income from which Social Security tax was withheld yields two credits
  • $3,960 of annual earned income from which Social Security tax was withheld yields three credits
  • $5,280 of annual earned income from which Social Security tax was withheld yields four credits

Social Security Full Retirement Age Fluctuations

The standard Social Security full retirement age is 67 years of age. The SSA has slowly been moving the Social Security retirement age from 65 to 67 years of age. Consequently, an individual’s retirement age is based on the year he or she was born. Note that while this age has changed, retiree-aged individuals should still file for Medicaid three months before their 65th birthday. Below is the age minimum for retirees according to their birth year:

  • 1943-1954: 66 years of age
  • 1955: 66 years and two months of age
  • 1956: 66 years and four months of age
  • 1957: 66 years and six months of age
  • 1958: 66 years and eight months of age
  • 1959: 66 years and 10 months of age
  • 1960 and later: 67 years of age

For those born on the first day of the year, consider your birth year as the previous year. If you do not qualify for Medicaid, you can learn who qualifies for Medicare to receive affordable health benefits after retirement.

Early and Delayed Social Security Retirement Age

While the Social Security full retirement age is 67, some workers can retire as early as 62 years of age. However, even if someone meets full or early Social Security retirement age, he or she must still have earned the minimum 40 credits. However, retiring early comes at a cost. Benefits are reduced for those retirees who claim them before reaching 67 years of age. For example, a retiree who retires at 62 rather than 67 will receive roughly about 25 percent less of his or her retirement benefits.

When you reach the Social Security full retirement age, you will receive 100 percent of your retirement benefits. Consequently, if you wait to retire as late as the Social Security delayed retirement age maximum of 70 years of age, you can increase the amount of your benefits and receive more than 100 percent of your retirement benefits (up to 10 percent in additional benefits). Delayed retirement can also result in higher lifetime work earning credits, and thus, increase your earnings record by an additional year worth of benefits.

Social Security Retirement Benefits Eligibility

When you meet Social Security retirement benefits eligibility criteria, you will receive anywhere from 27 percent up to 70 percent of your typical wages received while working. This percentage varies greatly because benefits are determined based on Social Security retirement age and earning bracket when in the workforce. Lower income retirees will get a higher amount of their wages, and the inverse is true.

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