Understanding the Basics of Social Security Benefits

Social Security is a federal government program that provides retirement, disability, and survivor benefits to eligible individuals and their families.

To be eligible for Social Security benefits, you must have earned enough credits through working and paying Social Security taxes. The amount of credits needed varies based on your age and the type of benefit you are applying for. Additionally, certain family members of eligible individuals may also be eligible for benefits.

There are several types of Social Security benefits available, including retirement benefits, disability benefits, survivor benefits, and spousal benefits. Retirement benefits are available to individuals who have reached a certain age and have earned enough credits. Disability benefits are available to individuals who have a qualifying disability that prevents them from working. Survivor benefits are available to certain family members of a deceased individual who was eligible for Social Security benefits. Spousal benefits are available to the spouse of an eligible individual who has reached a certain age or who is receiving disability or retirement benefits.

The amount of Social Security benefits you are eligible for depends on several factors, including your earnings history, the age at which you begin receiving benefits, and the type of benefit you are receiving. The Social Security Administration calculates your benefit amount based on your average indexed monthly earnings (AIME) and your primary insurance amount (PIA). Your AIME is the average of your highest 35 years of earnings, adjusted for inflation. Your PIA is the amount you would receive if you began receiving benefits at full retirement age (which varies based on your year of birth).

The age at which you should start receiving Social Security benefits depends on several factors, including your financial needs, health status, and life expectancy. You can begin receiving retirement benefits as early as age 62, but your benefit amount will be reduced if you begin receiving benefits before your full retirement age. If you delay receiving benefits beyond your full retirement age, your benefit amount will increase. The Social Security Administration provides online tools to help you determine the best time for you to start receiving benefits.

Yes, you can work and still receive Social Security benefits. However, if you are receiving retirement benefits and are under full retirement age, your benefits may be reduced if you earn more than a certain amount. Once you reach full retirement age, you can earn as much as you want without affecting your benefits. If you are receiving disability benefits, there are limits on how much you can earn while still receiving benefits. The Social Security Administration provides more information on how working affects your benefits.