How many credits do you need to qualify for the Social Security Benefits?

David Melton: Again, as you work and pay Social Security taxes you earn credits. You will hear people use the term “quarters of coverage,” but the proper term is “credits”. You can earn four per credits per calendar year. This year in 2016, for every $1,260 of earnings, you will receive one credit. Someone who earns $5,040 or more at any time in the year will receive those four possible credits. The number of the credits that the worker needs to be eligible for the benefits to be eligible depends on the type benefit.
• Retirement: 40 credits (10 years of work)
• Disability: Depends on age
• Survivorship Benefits (widows, widowers or orphans): Depends on age of deceased number holder
• You would always need at least 6 credits (1.5 years of work) to be eligible for benefit
• You never need more than 40 to be fully insured for a social security benefit (10 years of work)
It doesn’t take a lot of work to earn those benefits. Ten years of work will earn you that benefit.

How are retirement benefits calculated?
David Melton: You need those 40 credits to be insured for retirement benefits. Philosophically, Social Security is designed to replace lost earnings due to death, disability or retirement. So in the retirement scenario when we actually do the computation of the benefits, we are replacing the lifetime earnings defined as one’s high 35-years of work, earned at any point of their lifetime. We are looking at your earnings history, that year by year posting of wages, and calculating your high 35 years and from that deriving your Social Security benefit amount.

Freeman Owen: Can I chime in on that? We are giving Social Security seminars, and I had a friend approach me saying, “Freeman, you have a watch don’t you? There are two kinds of people in the world, the ones who want to know how the watch is made, and the ones who just want to tell time.”

He was referring to the AIM the Average Monthly Index Earnings. Some people just want to know how much they are going to get and they do not want to know the details. When we get the AIM there is a calculation, I refer to them as ben-points, there are basically three ben-points, and we won’t go through all the details now. The calculations give us what we call the Primary Insurance Amount (PIA) or full retirement age payout or benefit.

Can you elaborate a little bit more on the AIM after the break? We will take a little break here. Thank you for staying tuned. We will be right back.

Visit my website JustAskFreeman.com for more useful tips on how to get the most from your retirement planning & Social Security benefits. VA | MD | DC . Also, download my free “SAFE MONEY KIT” to get the most from your retirement dollars. Tel: 1-833-313-7233

Видео How many credits do you need to qualify for the Social Security Benefits? канала Freeman Owen