This article was updated on January 8, 2018, and was originally published on June 28, 2016.

One hot-button political issue this election cycle was the minimum Social Security benefit and how a worker who has reached Social Security age can potentially retire after 30 years of full-time work and live in poverty. So, what are the minimum Social Security monthly payments for retired workers, and how much of a raise would we need to keep retirees above the poverty line?

## How Social Security benefits are calculated

In order to be eligible for Social Security retirement benefits, you'll need to earn a total of 40 "credits" over the course of your working lifetime. In 2018, you'll get one credit for every \$1,320 in Social Security taxable earnings, and there is a maximum of four per year. So, to become eligible, you'll need to work for at least 10 years with earnings of at least \$5,280 per year, in 2018 dollars. (Note: The earnings amount required for one credit adjusts annually.)

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Once you're determined to be eligible, your monthly average earnings are calculated using your 35 highest-earning years of Social Security taxable wages (adjusted for inflation), which are limited by a wage cap that adjusts annually. If you work for fewer than 35 years, wages of zero will be factored in for the remaining years. The Social Security Administration publishes a worksheet (link opens PDF) that can help you calculate this on your own.

Your monthly average is then plugged into a formula to determine your primary insurance amount (PIA), or your monthly Social Security benefit if you start collecting at your full retirement age. As of 2018, the formula is:

• 90% of the first \$896
• 32% of the amount greater than \$896 but less than \$5,399
• 15% of the amount above \$5,399

As an example, if your average indexed monthly earnings were \$4,000, this formula says that you'll get a monthly retirement benefit of \$1,799.68.

## A special formula for minimum benefits

Since 1973, the Social Security Administration has used an alternative way of determining benefits for low-income retirees known as the special minimum benefit. Basically, it uses a worker's "years of coverage" to establish a minimum Social Security payment, not their earnings.

For 2018, one year of coverage is defined as Social Security earnings of at least \$14,310, and this amount is adjusted each year. Based on the beneficiary's years of coverage (at least 11, at most 30), this program establishes a minimum primary insurance amount. Here are a few of the current special minimum benefit amounts.

Years of Coverage

Special Minimum Primary Insurance Amount

11

\$40.80

15

\$210.50

20

\$423.50

25

\$636.00

30

\$848.80