Retirement, disability and survivor benefits are all funded by the Social Security tax, which 96% of American workers pay on their wages. Workers earn credits based on the amount of time they have worked towards these benefits. The amount of the benefit a worker can expect to receive depends on how many credits they have earned and how much they have made working. Below is a brief description of each type of benefit. For more information on applying for one of these types of benefits, contact an experienced attorney or your local Social Security office.
Retirement benefits are available to American workers who have earned enough credits and met the age requirements to qualify. If you were born in 1929 or after, you will need 40 credits (the equivalent of 10 years of work) to collect retirement benefits. The earliest you may begin collecting benefits is at age 62. However, if you begin collecting retirement benefits prior to your full retirement age, the amount you receive monthly will be permanently reduced. If you were born in 1938 or before, your full retirement age is 65. If you were born after 1938, your full retirement age will be between 65 and 67, depending on the year and month of your birth. It is not mandatory that you retire once you reach your full retirement age. In fact, if you keep working beyond that age, you can continue earning credits and increasing the amount of benefits you ultimately will receive, up to the age of 70. You also have the option of collecting retirement benefits and continuing to work, but this may lead to a lower monthly amount of benefits, depending on how much you earn. Spouses, ex-spouses, dependent children and disabled children may be eligible to receive family retirement benefits based on the credits earned by the worker.
Disability benefits are available to those who are unable to work because of a medical condition or illness that will last for at least one year or that will lead to death. In order to receive these benefits, applicants must meet a strict definition of disability and the requirements of two earning tests: the recent work test and the duration of work test. The first determines if the applicant has worked enough during a certain time period (ranging from the last three years to the last 10 years) while the second determines if the applicant has worked enough in total to earn the necessary credits for the benefit. The Disability Determination Office in your state of residence will review your medical history, speak with your treating physicians and assess your ability to work before determining whether you are qualified for disability benefits. Family disability benefits may be available to spouses, dependent or disabled children and divorced spouses upon meeting certain eligibility requirements.
Survivor benefits are available to spouses, dependent children and dependent parents who have lost a wage earner. The benefits are akin to a federal life insurance policy. Like other Social Security benefits, you earn credits toward survivor benefits based on the wages on which you pay Social Security taxes. The number of years you must work in order to earn enough credits for benefits varies, with those workers dying at a younger age requiring fewer credits than older workers. The maximum number of years any worker would have to work to be eligible is 10 years. Widows and widowers can begin to collect the benefit upon turning 65 if born before January 1, 1940. If born after this date, they must wait until they turn 67 to collect the benefit. If the widow/widower is taking care of a dependent child 16 or younger or disabled, there is no age restriction. Dependent children 18 or younger (or 19 or younger if enrolled full-time in a secondary school) may also receive survivor benefits. Additionally, children disabled before turning 22 and who remain disabled after this age also may receive these payments. Parents who are at least 62 or older and were dependent on the worker for at least 50% of their support may be eligible to collect survivor benefits as well. In some instances, ex-spouses also may collect survivor benefits, if they meet eligibility requirements.
Preparing to Meet with Your Estate Planning Attorney
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