RSS FeedSocial Security Benefits: Your Questions about Social Security Credits
Your Social Security Benefits Questions: Social Security Credits
Q: According to Social Security, I havent obtained enough credits to be eligible for benefits. How do these credits work, and how is it possible for me to not have enough when I have worked for years and paid taxes the whole time?
A: Credits that go towards qualifying you for benefits from Social Security are earned by working and paying your Social Security taxes. The Social Security service bases the number of credits a person receives on the amount of money they earn and the amount of time they have worked. With each year that passes, the amount of money you need to make in order to earn social security credits rises; in 2008, it is one credit for $1,050 of earnings. You can receive a maximum of four credits annually (which is why credits are also called ‘quarters’), and any credits you earn will remain on your record even during periods in which youre not working.
In order to qualify for social security benefits, you need to reach a certain number of credits. The number of credits you need for social security is based on your current age, and is calculated by the number of years you have worked. If youre looking to be eligible for social security benefits for retirement (and are of more than 62 years of age), you will need to have 40 credits (the equivalent of 10 years of work).
However, it can happen that a person who has worked a seemingly appropriate number of years does not gain the necessary credits for social security benefits. This occurs to workers who, during their working careers, did not (or do not) have social security taxes taken out of their wages. This situation mostly occurs among Federal employees hired before 1984, railroad employees with ten years or more of service, and state and local government employees whose employers do not participate in social security.