Social Security 101

To get Social Security retirement benefits, you must be 'insured,' and you must be at least 62 years old. (OlegRi/Shutterstock)

Sometimes this column can get into some complicated or esoteric Social Security rules or circumstances. But it dawned on me that many of the emails I get from readers are asking questions about some pretty basic Social Security stuff. So this week’s column will be like a refresher course in Social Security. I will just go over the basic rules for various kinds of Social Security benefits.

But I will only scratch the surface of these basic rules. For more information, you'll need to read my little Social Security guidebook. Instructions for getting that book are at the end of this column.

Retirement Benefits

To get Social Security retirement benefits, you must be “insured,” and you must be at least 62 years old. Being insured means you have a minimum of 40 credits (sometimes called “quarters”). Because you can only earn four credits per year, that means you must have worked and paid Social Security taxes for 10 or more years to qualify for benefits.

You get your full retirement benefit if you wait until your full retirement age (FRA) to apply for those benefits. Benefits are reduced by roughly one half of one percent for each month they are taken before FRA. If you take benefits at 62, you will get somewhere between 70 percent and 75 percent of your full benefit, depending on what your full retirement age is. (If you’re not sure what your FRA is, you'll find a chart in my book.)

If you delay taking benefits beyond your FRA, you will get a two-thirds of one percent increase in your eventual retirement rate for each month you delay taking those benefits. But those DRCs stop getting paid once you turn 70.

If you’re over your FRA, you can work and make as much money as you want and still be due all your benefits. But if you start your benefits before your FRA, you will lose one dollar in benefits for every two dollars you earn over $18,960. Only earnings from a job count toward the earnings penalty limits, not savings or investment income. There is a more lenient income threshold ($50,520) beginning in January of your FRA year up until the month before the month you reach your FRA.

Disability Benefits

To qualify for Social Security disability benefits, you must be “insured,” and you must have a physical or mental impairment that is so severe it will keep you from working for at least 12 months. For most people, being insured means having at least 40 work credits. But some of those credits must be earned recently. The general rule is that you need to have worked and paid Social Security taxes in five out of the last 10 years.

When you file for disability benefits, you must provide contact information for anyone who has treated you for your condition. Those doctors, hospitals, and so on will have to provide SSA with your medical records so that a decision can be made about your eligibility for benefits.

And here’s a special message for any disabled seniors. Once you are over your full retirement age, disability benefits are no longer payable. Or to put that another way, after FRA, a disability benefit pays the same rate as a retirement benefit.

Spousal Benefits

Before I get into this section, a qualifier. Although both wives and husbands are potentially due benefits on the other spouse’s Social Security account, I’m going to address this section to women because 95 percent of such benefits are paid to women, and it will eliminate a lot of cumbersome “he/she” or “him/her” double pronouns.

A woman can get spousal benefits on her husband’s record if he is already getting benefits, if she is at least 62 years old, and if she isn’t due higher benefits on her own record.

A divorced woman can get benefits on her ex-husband’s record if he is at least 62 years old (note: he doesn’t have to be getting benefits himself), if they were married for at least 10 years, if she is not currently married to someone else, if she is at least 62 years old, and if she is not due higher benefits on her own Social Security record.

The spousal rate (for both currently married and divorced women) is somewhere between about 30 percent and 50 percent of the husband’s full retirement rate, depending on how old she is when she starts benefits. That relatively low spousal rate means a working woman will usually get higher benefits on her own account than she will be due as a spouse on her husband’s record.

Widow’s Benefits

Same qualifier here as above. Although men can get widower’s benefits, I’m addressing this section to women because 95 percent of the time these benefits are paid to widows.

A widow gets benefits if she’s at least 60 years old and not due higher benefits on her own record. Although widows can employ the “widow’s option,” which means she can take reduced benefits on one record and later switch to higher benefits on another record. For example, she could take a 70 percent reduced widow’s benefit at 60 and switch to 100 percent of her own at full retirement age, or 132 percent at age 70.

If a widow remarries after age 60, she can continue to get widow’s benefits on her deceased first husband’s record.

The same rules essentially apply to divorced widows, with the added stipulation that she must have been married to her ex-husband for at least 10 years.

At the outset, I said this was a very basic outline of Social Security benefits. I can think of a thousand benefit and eligibility scenarios I didn’t get into. To learn more about them, you can read my guidebook. Ordering instructions are below.

Tom Margenau worked for 32 years in a variety of positions for the Social Security Administration before retiring in 2005. He has served as the director of SSA’s public information office, the chief editor of more than 100 SSA publications, a deputy press officer and spokesman, and a speechwriter for the commissioner of Social Security. For 12 years, he also wrote Social Security columns for local newspapers, and recently published the book “Social Security: Simple and Smart.” If you have a Social Security question, contact him at [email protected]