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You'll Need a (Slightly) Bigger Paycheck in 2022 to Earn Social Security Credits

By Christy Bieber – Oct 30, 2021 at 12:03PM

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Work credits are the ticket to Social Security eligibility and they are getting harder to earn.

Will you be eligible for Social Security retirement benefits? These benefits are earned benefits, which means you aren't guaranteed to receive retirement checks from the government.

In order to receive Social Security income as a retiree, you must earn something called work credits. And, in 2022, those will be a little harder to get than they were in the past.  

Two adults sitting at table looking at laptop and paperwork.

Image source: Getty Images.

How Social Security work credits are changing in 2022

Because Social Security is an earned benefit, you become eligible for it only by paying into the system. As you work and earn money that's subject to Social Security tax, you earn work credits. You'll need a total of 40 of them to qualify for retirement benefits. 

You are allowed to earn up to four total work credits total per year. And earning each credit requires you to pay taxes on a set amount of earnings. In 2022, that amount is going up. 

While each work credit cost $1,470 in 2021, you'll need to earn $1,510 to earn one in 2022. So, to max out your work credits for the year, you would need a total of $6,040 in earnings subject to Social Security tax -- up $160 from last year.

A change in the amount of earnings needed to earn a work credit isn't surprising, as the cost of work credits goes up in most years to account for wage growth

Now, to be clear, you can earn work credits at any time in your career -- as long as you get the required 40 before retirement. You don't have to earn credits in 2022 to become eligible for benefits. But, since you can earn a maximum of four work credits per year, you do need at least a 10-year work history to become eligible for Social Security retirement income. 

What if you don't earn enough work credits?

If you do not earn 40 work credits over the course of your career, you will not become eligible for Social Security on your own work history. But that doesn't necessarily mean you are out of luck in getting benefits. 

In some cases, you can qualify for spousal benefits instead of claiming your own retirement benefits. Spousal benefits are available if you're currently married, or if you are divorced but your marriage lasted a decade. You can also qualify for survivor benefits if you've been widowed or if your ex-spouse passed away after a marriage lasting 10 years or longer. 

These spousal or survivor benefits could give you Social Security income even if you never worked at all. They could also, in some cases, be worth more than your own retirement benefits if you earned enough work credits but your earnings weren't as high over the course of your career. 

What if you earn more than enough to earn work credits?

Since you can only earn four work credits each year, earning more than $6,040 in 2022 will not get you any closer to qualifying for Social Security. 

However, you pay Social Security tax on all of your income up to an annual wage base limit, which is $147,000 in 2022. Social Security keeps track of what you earn and your benefits are based on average wages in the 35 years you earned the most.

So, even if earning more doesn't necessarily help you in terms of eligibility, it will result in a larger benefit in the future.

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