For tens of millions of Americans, Social Security is a financial lifeline that they simply couldn't do without. As of the June snapshot from the Social Security Administration, some 62.5 million people -- most of whom are retired workers, but also including the survivors of deceased workers and the long-term disabled -- were receiving a monthly benefit. Of those retired workers, a whopping 62% were found to rely on Social Security for at least half their monthly income. It's simply that important.

The program is also covering many more generations of future retirees. An estimated 175 million workers and family members are covered in the event of a long-term disability and/or by survivor's insurance protection, should a worker die unexpectedly. 

Two Social Security cards lying atop a W2 tax form, highlighting payroll taxes paid.

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Most Americans earn a Social Security check the old-fashioned way

But, truth be told, not all older Americans will be able to collect a Social Security benefit. Despite often being referred to as an "entitlement program," Social Security is anything but an entitlement. In reality, it's a benefit that Americans need to earn through work, albeit there are a slim number of exceptions to this rule.

In order to qualify for retired worker benefits, a person must earn 40 lifetime work credits. These credits are actually pretty easy to earn, but the key fact to remember here is that the maximum number of credits that can be earned in a given year is four. In 2018, workers will earn one work credit for each $1,320 in wage income. Therefore, if you generate $5,280 in earned income this year, you'll have maxed out your work-credit potential. So, to qualify for Social Security retirement benefits, you'll need at least 10 years of work history, given that a maximum of four credits can be earned per year.

While a vast majority of Americans are going to qualify for Social Security benefits based on their work and earnings history, there are a few rare exceptions to the rule. For instance, disabled workers may qualify for benefits even if they haven't reach 40 lifetime work credits. A staggered age-to-credits scale determines whether an individual will qualify for benefits.

It's also possible for some people to receive benefits even if they've never worked a day in their life. If an individual is married, and the spouse dies after qualifying for Social Security benefits, the surviving spouse who never worked may qualify for a survivor benefit based on the deceased spouse's earnings history.

These retired workers, the long-term disabled, and survivors (along with some of their family members) make up the 62.5 million people receiving benefits today.

A senior man with his pockets turned inside out, showing that he has no money.

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Almost 1.7 million aged Americans will never receive a Social Security benefit

Yet for as many people as Social Security covers, an estimated 3% of the population ages 60 to 89 (nearly 1.7 million people, as of 2015) will never receive a benefit. Known as the "never beneficiaries" by the Social Security Administration, these folks fall into four categories: 

  1. Infrequent workers
  2. Late-arriving immigrants
  3. Noncovered workers
  4. Those who die before receiving benefits

Of the 1.67 million people ages 60 to 89 who'll never receive a Social Security check, 44.3% of them are infrequent workers. These are folks who simply didn't earn the prerequisite 40 lifetime work credits needed to qualify for a retirement benefit. Perhaps they relied on very limited part-time work throughout their life, or were stay-at-home parents or spouses. Whatever the reason, not reaching 40 lifetime work credits tends to have a disastrous impact on these infrequent workers, 77.2% of whom live below the poverty line, according to the Social Security Administration.

Not too far behind infrequent workers are late-arriving immigrants, who account for 37.3% of the aforementioned 1.67 million never beneficiaries. To be crystal clear, the Social Security program does not provide retired-worker benefits to undocumented workers. This 37.3% includes immigrants who've come to America and become legal citizens. However, they've done it late in their life (age 50 and beyond), which means they haven't had enough time to earn the 40 work credits needed to qualify for benefits. Poverty rates for these late-arriving immigrants are very high as well at 66.3%.

A senior woman in deep thought with her head resting on her interlocked hands.

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Approximately 11.4% of the never beneficiaries are noncovered workers. This category refers to workers who've earned enough to qualify for benefits, but who work in noncovered employment, such as state or local government employees. Because these folks usually receive a pension, their poverty rate tends to be significantly lower. According to the Social Security Administration, 15.8% of noncovered workers were living below the federal poverty line as of 2015.

Lastly, 6.9% of never beneficiaries will pass away before they begin receiving benefits. These are people who are in line to receive benefits and have qualified by earning 40 lifetime work credits. However, they die either between the ages of 60 and 62, prior to being able to claim Social Security benefits (which can be claimed at age 62, or any point thereafter), or after age 62, but prior to a claim being made.

While not all seniors will qualify for Social Security benefits, it's important to recognize that, conversely, 97% of aged Americans are protected during their later years by some form of guaranteed income from the program.