Most Americans are counting on Social Security to help them cover their expenses in retirement, but many remain uninformed about how the program actually works. That might not seem like a big deal, especially if you're decades away from claiming, but educating yourself about how Social Security works is crucial to squeezing the most out of the program.
You can see how much you actually know by answering the following three Social Security questions and checking the answers below.
- How many years do you have to work to qualify for Social Security?
- What is your full retirement age (FRA)?
- How much is the average Social Security check?
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1. How many years do you have to work to qualify for Social Security?
You must work long enough to earn 40 credits in order to qualify for Social Security on your own work record. The definition of a credit varies from year to year. In 2021, you must earn $1,470 to earn one credit, and you can earn a maximum of four credits per year. You must work for at least 10 years to qualify for Social Security, though they don't have to be consecutive.
But the answer's a bit more complicated than that. Technically, you may be eligible for benefits even if you've never worked in your life, as long as you're married to someone who qualifies for Social Security. In that case, you could get up to 50% of their benefit at their full retirement age (FRA). More on that below.
If you want the most out of Social Security, you have to work at least 35 years. The government uses your average monthly earnings during your 35 highest-earning years, adjusted for inflation, to calculate your monthly benefit. If you work fewer than 35 years, you'll have some zero-income years factored in, which will significantly reduce your checks.
2. What's your full retirement age (FRA)?
Your full retirement age (FRA) is the age at which you become eligible for your full Social Security benefit, based on your work history. The government assigns everyone an FRA based on their birth year.
For those born between 1943 and 1954, it's 66. Then it rises by two months every year thereafter until it reaches 67 for those born in 1960 or later.
It's possible to claim benefits as early as 62, but signing up before your FRA reduces your checks. You'll only get 70% of your full benefit per check if your FRA is 67 and you sign up at 62. Those with an FRA of 66 will get 75% of their full benefit per check if they sign up at 62.
Every month you delay benefits will boost your checks a little until you reach your maximum benefit at 70. This is 124% of your full benefit per check if your FRA is 67, or 132% if your FRA is 66.
Delaying benefits is usually a good idea if you can afford to do so and believe you'll live into your 80s or beyond. But if you have a terminal illness or need help paying your bills right now, signing up earlier could be a wiser choice.
Married couples also need to consider how the age at which they claim will affect their partner. The maximum spousal benefit is 50% of the worker's benefit at their FRA. Delaying benefits past your FRA won't increase spousal benefits, but starting early can hurt them. If you sign up before your FRA, the maximum spousal benefit is 50% of your current benefit.
3. How much is the average Social Security check?
The average Social Security benefit for retired workers is about $1,559 per month. However, households with multiple people claiming benefits could receive more than this. If there are two workers in the household that qualify for the average benefit, the couple could receive over $3,100 in monthly Social Security benefits.
That's a nice chunk of change, but it may not be enough to cover all your retirement expenses. That's why it's crucial to build up a lot of personal savings to compensate for what Social Security doesn't cover.
If you want an accurate idea of how much you can expect from the program, create a my Social Security account. This will show you how much you qualify for based on your current work history, and how working longer, earning more, or claiming at a different age could affect your benefits.
Use this knowledge to make an informed decision about when you ought to sign up for Social Security. Circumstances might force you to change that plan as time goes on, but by having a goal in mind, you can better predict when you'll be able to afford to retire and how much you must save on your own.
