By: Vonda VanTil, Social Security Public Affairs Specialist
Question: I’ve only been working for a few years, and I’m wondering how I earn Social Security benefits. What are credits and how many do I need to qualify for benefits?
Answer: We use your total yearly earnings to calculate your Social Security credits. “Credits” are the units we use to measure whether you qualify for Social Security benefits. The amount needed for a credit in 2015 is $1,220. You can earn a maximum of four credits for any year. The amount needed to earn one credit increases automatically each year when average wages increase.
You must earn a certain number of credits to qualify for Social Security benefits. The number of credits you need depends on your age when you apply and the type of benefit for which you are applying. No one needs more than 40 credits for any Social Security benefit. You can learn more about earning credits by reading How You Earn Credits at www.socialsecurity.gov/pubs.
Question: I’m planning my retirement. What is the maximum Social Security benefit I might receive?
Answer: The maximum benefit depends on the age you retire and how much you earned in your lifetime. For example, if you retire at age 62 in 2015, your maximum benefit will be $2,025. If you retire at full retirement age in 2015, your maximum benefit will be $2,663. If you retire at age 70 in 2015, your maximum benefit will be $3,501. You can estimate your benefits by using our Retirement Estimator at www.socialsecurity.gov/estimator.
Question: I’m retired, and the only income I have aside from my Social Security retirement benefit is from an Individual Retirement Account (IRA). Are my IRA withdrawals considered “earnings?” Could they reduce my monthly Social Security benefits?
Answer: No. We do not count non-work income, such as annuities, investment income, interest, capital gains, and other government benefits, and they will not affect your Social Security benefits. Most pensions will not affect your benefits. However, your benefit may be affected by a government pension from work on which you did not pay Social Security tax. If you have wages or self-employment income and you are under your full retirement age, this income may affect your benefit amount. For more information, visit our website at www.socialsecurity.gov or call us toll free at 1-800-772-1213 (TTY 1-800-325-0778).