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All About Social Security Benefits

How much money can you expect from social security when you retire?

Is the U.S. social security system going to go broke before you have a chance to benefit from all those years of paying into it? Well, no one knows for sure, but there's no question that, with the baby-boomer generation beginning to hit retirement age, the social security system may require overhauling. There has been much commotion in recent years about social security reform. Several legislative changes have been phased in, including:

  • Increases in the minimum age for eligibility. The minimum age for receiving full benefits has increased from 65 to 66 or 67, depending on your date of birth.

  • Penalties for retiring earlier than age 67 or 66 (for those born before 1960). Under the current rules, if you retire at age 62, you will permanently lose 30% of the benefits you would receive if you retired at age 67.

  • Rewards for extending retirement. If you wait until you are 70 to take retirement instead of age 67, your annual social security benefit will increase 8% per year, or 24% total. See the SSA Retirement Benefits booklet for more information.

For a detailed analysis of the pros and cons of collecting social security benefits early, read the New York State Society of CPAs article Retirement at 62: Is Receiving Social Security Early Worth It? For more information about social security benefits and penalties, use the SSA Retirement Planner.


So, how do you get social security benefits? Currently social security benefits are based on the total number of quarters you have earned wages. This refers to calendar quarters, so you can earn up to four quarters each year you work. You must work for at least 10 years and earn 40 quarters to be eligible for social security benefits. The minimum dollar amount you earn for each quarter is indexed to inflation each year. This means you must earn a minimum amount of money during a given quarter for it to count toward meeting the overall requirement of 40 quarters.

Today, you are eligible for full benefits at age 67 (age 66 if you were born in the 1950s); however, you may begin collecting social security at age 62. As explained above, your benefits will be permanently reduced if you do so.

Find Out How Much You Can Receive

The Social Security Administration will estimate the amount of your benefit if you complete a Request for Social Security Statement. This standard form is referred to as Form SSA-7004 and can be found by visiting the Social Security Online webpage at www.ssa.gov. You can also request your personalized estimate by either calling toll-free at 1-800-772-1213 or writing to the Social Security Administration at 8515-A Liberty Road, Randalstown, MD 21133. See the Social Security Statement page for more information. Keep in mind these are estimates only, since your benefits are indexed against the cost of living each year, and may be imprecise if you are less than 60 years of age.

You should verify that all of your quarters worked are credited properly by periodically requesting a benefit estimate. You can do this every few years to ensure that your employer(s) are reporting all your earnings and that the Administration has credited your wages to the correct social security number. If you determine there is a discrepancy between your records and SSA's, send them a letter along with a copy of your W-2 for the year(s) in question to get your records corrected. You want to make sure you get credit for every penny you deserve.

Additional Benefits You May Be Eligible For

Supplemental Security Income (SSI)

The U.S. Treasury funds an additional retirement program that is handled by the Social Security Administration: Supplemental Security Income (SSI). This additional benefit is available to U.S. citizens with very low incomes and minimal assets. If you are over the age of 65, blind, or disabled, you may qualify for SSI. Because some states have additional payments to the federal SSI, the benefit amount depends upon where you live and your total earnings. For more information, visit the Supplemental Security Income page at Social Security Online.


If you become disabled, either mentally or physically, and cannot work for at least a year, or you develop a terminal condition, you might be eligible to receive a monthly disability benefit from social security. For more information, read the SSA booklet Disability Benefits.

Social Security: a Critical Income Supplement

If you've read some of our other articles on retirement, you know that social security benefits are a critical supplement to your other retirement income. Even if major changes to the system are adopted, most of us will rely on social security as a significant part of our retirement income. Keep an eye on it and stay abreast of legislative changes, because your comfort in retirement may depend on what happens. For more information on retirement planning, read the related articles in our Knowledge Center Library.

Take control of your finances with our debt help tools. Use our calculators and budget planner to help you manage your money.

For more information on personal finance, or debt consolidation, search the CareOne Credit Knowledge Center Articles.

To learn about our debt management service, see the CareOne Credit Quick Answer Guide.


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