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Social Security Retirement Benefits: What You Need to Know


Q: What is a Social Security “credit”?


A: During your working years, you earn Social Security credits based on how much you earn in wages. The amount of earnings you need for one credit rises as average earnings levels rise. In 2014, you receive one credit for every $1,200 you earn in wages. You can earn up to a maximum of four credits per year. Most people need 40 credits (equivalent to 10 years of work) to be eligible for retirement benefits. For more information about credits, read “How You Earn Credits” at www.socialsecurity.gov/pubs.


Q: My husband doesn’t have enough work credits to qualify for Social Security retirement benefits. Can he qualify on my record?


A: A spouse receives one-half of the retired worker’s full benefit unless the spouse begins collecting benefits before full retirement age. If your husband begins collecting benefits based on your Social Security record before he reaches full retirement age (age 65 - 67, depending on the year he was born), the amount of his benefit is reduced by a percentage based on how many months short of full retirement age he is.


Q: How early can I begin receiving Social Security retirement benefits?


A: You can get a reduced benefit as early as age 62. The 1983 Social Security Amendments raised the full retirement age for people born in 1938 and later, but it did not change the minimum retirement age.


Q: Is there any penalty for beginning to take my benefits at age 62?


A: Yes. If you start taking your benefits before your full retirement age, the amount you can collect will be lower than the amount you can collect at your full retirement age. (If you wait until full retirement age, your benefits will be about 33 percent higher, and your benefits will be about 76 percent higher if you defer them to age 70.) Also, if you begin taking benefits at age 62 while you are still working, $1 in benefits will be deducted for every $2 you earn above $15,480 (for 2014). Visit the “Retirement Estimator” at www.socialsecurity.gov/estimator for more information.


Q: When I start receiving benefits, will the amount stay the same for the rest of my life?


A: No. Generally, your benefit amount increases every year to protect you against inflation. An increase in the consumer price index will give you a cost-of-living adjustment (COLA). For 2014, that COLA adjustment is 1.5 percent. Your benefit also may increase if you work and continue to pay Social Security taxes while receiving benefits. If your earnings for the year are higher than those used to compute your benefit originally, the Social Security Administration will substitute the new year of earnings. The higher your earnings, the more your refigured benefit might be. If your earnings are high enough for the Social Security Administration to deduct excess earnings from your benefits, your benefits will be recomputed when you reach retirement age. This effectively increases your benefit because the months when benefits were reduced or withheld due to excess earnings are left out.


Your monthly benefit may seem to decrease, however, if health care costs rise faster than the COLA. A rise in Medicare premiums can offset any COLA increase. A special rule called “Hold Harmless” protects your monthly benefit from being reduced. To learn more, visit https://secure.ssa.gov/apps10/poms.nsf/lnx/0601001004.


Q: How do I apply for retirement benefits?


A: You can apply online or make an appointment with a Social Security representative at a local office. Generally, it is easier and faster to apply for benefits online at www.socialsecurity.gov. The process takes as little as 15 minutes and, in most cases, you’re finished once you’ve submitted your electronic application. Usually, there are no forms to sign or documents to mail.


The information for this “Law You Can Use” column was provided by the Social Security Administration. It was prepared by the Ohio State Bar Association. Articles appearing in this column are intended to provide broad, general information about the law. Before applying this information to a specific legal problem, readers are urged to seek advice from an attorney.

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