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SOCIAL SECURITY BENEFITS

At what age can you collect Social Security?

The Social Security Administration manages a number of programs aimed at supporting not just retired workers but also the disabled and families.

Update:
The Social Security Administration manages a number of programs aimed at supporting not just retired workers but also the disabled and families.
Kevin DietschAFP

The Social Security Administration (SSA) has been around since 1935 when the effects of the Great Depression laid bare the inadequacies of the patchwork of local, state and family networks to care for the elderly.

The Social Security Act passed by Congress and signed by Franklin D Roosevelt created much more than a federal support system for the elderly. Over the course of 2020 the SSA provided close to $1 trillion in support for more than 65 million retired workers, survivors of retirees, and disabled people.

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When you can first claim Social Security payments depends on the program and credits earned

The Social Security Administration oversees the Old-Age, Survivors, and Disability Insurance (OASDI) program, best known for providing retirement benefits to seniors, but as the name indicates, it also provides survivor benefits and disability income.

Each of the three programs has different requirements and number of credits needed in order to claim the monthly income support. Workers can earn up to four credits per year which will determine the level of benefits recipients will receive when they begin to claim. In the case of retirement, you need to earn 40 credits in order to be eligible for benefits upon retirement, but there is a different calculation for survivors and disabled beneficiaries.

How are Social Security credits calculated?

In 2022, one credit is granted for every $1,510 in covered earnings until a maximum of $6,040 which is equal to four credits. Over a lifetime of work, you may earn more credits than the minimum 40 credits, but this does not affect the benefits you receive. The amount received in benefits and what you pay in per credit change each year based on the annual cost-of-living adjustment (COLA).

Workers pay into the system through a payroll taxes called Federal Insurance Contributions Act tax (FICA) or Self Employed Contributions Act Tax (SECA). The funds collected from FICA and SECA go into two Social Security trust funds, one for old-age and survivors, the other for disability beneficiaries, which are used to pay out benefits.

Minimum age to claim Social Security retirement benefits

As stated before, you need to earn at least 40 credits to claim old-age benefits, but exceeding that number doesn’t translate into a higher payout when you start collecting on what you put into your pot. Old-age benefits are based on your earnings record. The Social Security Administration takes the average of your 35 highest-earning years along with other factors to calculate your monthly benefit when you claim.

You can begin to collect benefits at 62, given that you’ve earned enough credits, but the longer you work, the higher your potential payout when you apply for benefits. Waiting until full retirement age (FRA) will greatly increase the amount you can claim, which is 66 for people born in 1954. Those born after 1954 will need to tack on two months for each subsequent year until 1960. For those born in 1960 and after full retirement age is 67, but you won’t receive your maximum possible benefits unless you work until 70.

When can you begin to claim Social Security survivor benefits?

Survivor benefits to family members from a contributor depend on the age when that worker died, with fewer credits needed the younger the worker dies. The Social Security Administration has a special rule whereby the surviving children, and spouse who is caring for the children can receive survivors benefits after the worker has attained just six credits in the three years prior to his or her death.

The Social Security Administration will continue to pay survivors of someone already receiving retirement or disability benefits at the time of their death based on that entitlement.

When can you begin to claim Social Security Disability Insurance?

Those who are blind or have a disability could have access to potentially two different programs if they meet the criteria.

Social Security Disability Insurance (SSDI) is available to those who are registered as disabled, and can’t work due to their physical or mental disability that is expected to last for a year or more, or result in death. Recipients must satisfy certain work history requirements but family members can also be used to satisfy the requirements, which would be difficult for many to achieve who are born disabled.

There is also Supplemental Security Income (SSI) which provides financial assistance for people with disabilities, along with seniors, who have a limited income. Most states have their own support programs to assist people on SSI benefits.

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