Answers to frequently asked questions about your retirement benefits
AARP | Andy Markowitz | Updated June 21, 2022 | Social Security | Life Insurance
Social Security provides benefits to more than 65 million people, and those monthly payments have an enormous impact on older Americans’ financial health. According to Census Bureau data:
- Social Security accounts for at least 50 percent of income for more than half of households headed by someone 65 or older.
- It provides nearly 80 percent of income for 1 in 5 such households.
- It keeps more than 26.5 million people from falling below the poverty line.
An institution that looms so large in American life is bound to generate questions about what it does and how it works. Here are the answers to some of the most frequently asked questions about Social Security. You’ll find more detailed information on these issues in AARP’s Social Security Resource Center.
1. Is Social Security just for retired workers?
No. As of April 2022, 72.7 percent of beneficiaries were retirees. The remainder were spouses, ex-spouses and children of retirees (4.3 percent); disabled workers and their families (14 percent); and survivors of deceased beneficiaries (9 percent).
2. At what age can I start collecting Social Security benefits?
You can begin receiving retirement benefits at age 62, but your payments will be more significant if you wait until your full retirement age (66 years and 4 months for people born in 1956, gradually rising over the next few years to 67). If you are eligible for survivor benefits or Social Security Disability Insurance (SSDI), you can start collecting earlier.
3. How do I sign up for Social Security?
You can apply for retirement, spousal or disability benefits online, by phone at 800-772-1213, or at your local Social Security office. For survivor benefits, you can apply by phone or in person. Local offices reopened to walk-in traffic in April after being largely closed to visitors for more than two years due to the COVID-19 pandemic. Still, the Social Security Administration (SSA) strongly recommends calling ahead to make an appointment.
4. How long do I need to work to become eligible for benefits?
For retirement benefits, at least 10 years. Social Security uses a system of credits, which you collect by working and paying Social Security taxes. You can earn up to four credits a year, and you need 40 credits to qualify for retirement benefits. The credit threshold may be lower for disability benefits.
No, you can receive benefits while working. But if you are below full retirement age and earn more than a certain amount, your monthly benefits will be temporarily reduced. Once you reach full retirement age, the reduction is eliminated, and your benefits will be increased to make up for what was lost over time.
5. Must I stop working to collect retirement benefits?
No, you can receive benefits while working. But if you are below full retirement age and earn more than a certain amount, your monthly benefits will be temporarily reduced. Once you reach full retirement age, the reduction is eliminated, and your benefits will be increased to make up for what was lost over time.
6. How much will I get from Social Security?
That depends on a number of factors, most crucially your lifetime earnings from work in which you paid Social Security taxes. Social Security takes your 35 highest-earnings years, calculates an inflation-adjusted average, and plugs that into a progressive formula that determines your “basic” benefit. The amount will also be affected by how old you are when you claim benefits. You won’t know it for sure until you file, but you can use the AARP Social Security Calculator to get an estimate.
