Guide to Understanding Social Security

Social Security is a federal program designed to ensure financial security for workers and their families. In 2022, approximately 71 million people received benefits from programs administered by the Social Security Administration (SSA). With various benefits available — each with unique eligibility requirements and characteristics — understanding how each type functions and how to qualify can help you maximize the benefits you receive.

Social Security is a federal program in the United States designed to provide financial support to individuals during retirement, in case of disability or to family members after the death of a wage earner. Established in 1935 as part of the New Deal, it was initially created to address the economic challenges faced by older Americans during the Great Depression and continues to support millions today.

Social Security operates as a key part of the U.S. social safety net, using a system of contributions and benefits. Here’s a detailed look at the process:

Social Security retirement benefits provide regular payments from the SSA to individuals who have reached the eligible retirement age. To qualify, you must have accumulated at least 40 credits through employment covered by Social Security taxes. These benefits are a fundamental source of income for many retirees but are not intended to replace all your income. We recommend exploring additional financial options to ensure sufficient funds for your monthly expenses as you age.

Eligibility for Social Security retirement benefits hinges on a credit system and age requirements set by the SSA.

In 2024, the average monthly Social Security retirement benefit is estimated at $1,907. Your income from work can influence your benefits, particularly if you begin receiving them before reaching your full retirement age of 67.

If you start receiving benefits at 62 (the earliest eligibility age) and continue to work, you can earn up to $22,320 ($1,860 per month) without affecting your benefits. Beyond this threshold, $1 is deducted from your benefits for every $2 earned above the limit.

You can apply for Social Security retirement benefits online, by calling the SSA's national toll-free service at 1-800-772-1213 (TTY 1-800-325-0778) or by visiting your local Social Security office. If you reside outside the U.S. or its territories, contact the nearest U.S. Social Security office, U.S. Embassy or consulate. Always call ahead to schedule an appointment.

You can start the application process up to four months before you want your benefits to begin. For instance, if you plan to start receiving benefits at 62, you can apply when you are 61 years and eight months old. The timing of your application is crucial as it influences your monthly benefit amount. Typically, it takes about six weeks to process a retirement benefits application, although this timeframe can vary based on individual circumstances.

When applying, ensure you have all the necessary documents ready, including your birth certificate, proof of U.S. citizenship or legal residency, U.S. military service papers if applicable and your W-2 forms or self-employment tax returns.

Social Security offers disability benefits to provide income support for individuals who cannot work due to a significant medical condition expected to last at least one year or result in death. There are two main programs: Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI).

Eligibility for Social Security Disability benefits varies between the SSDI and SSI programs.

To qualify for SSDI, applicants must meet the following criteria:

SSI is aimed at individuals who may not qualify for SSDI due to insufficient work history but need financial assistance:

SSDI benefits are determined similarly to retirement benefits, based on your average earnings from jobs where you paid Social Security taxes. In 2024, you cannot qualify for SSDI if your earnings exceed the substantial gainful activity (SGA) limit, disqualifying you from receiving benefits. As of March 2024, the average monthly disability benefit was $1,714.

For SSI, the maximum monthly benefit amounts for 2024 are $943 for an individual and $1,415 for a couple. However, the actual payment you receive may be adjusted downward depending on:

• Your income and the income of certain family members
• Your living situation
• Other personal factors that affect your financial needs

You can apply for disability benefits online. If you cannot complete the application online, you can call the SSA toll-free at 1-800-772-1213 between 8:00 a.m. and 7:00 p.m. to make an appointment. Those who are deaf or hard of hearing can contact the SSA via TTY at 1-800-325-0778 during the same hours.

Apply for disability benefits as soon as you become disabled. SSDI includes a five-month waiting period except for disability due to amyotrophic lateral sclerosis (ALS), meaning your benefits start in the sixth full month after your disability begins. For SSI, benefits are paid from the first full month after you file your claim or, if later, from the date you become eligible.

Social Security survivor benefits are monthly payments provided by Social Security to the family members of a deceased worker who accumulated sufficient Social Security credits throughout their career. These benefits are designed to partially replace the income lost due to the death of the family’s wage earner, helping to support the financial stability of the surviving family members.

Survivor benefits extend to various family members of a deceased worker who earned the necessary Social Security credits during their lifetime. Eligibility for survivor benefits includes:

The amount received from Survivor Benefits varies based on the relationship to the deceased and the age at which benefits begin.

Widows or widowers at full retirement age are entitled to 100% of the deceased’s benefit. Those aged 60 to full retirement age receive between 71.5% and 99% of the benefit, while disabled widows or widowers aged 50 through 59 are eligible for 71.5%. A widow or widower of any age caring for a child under age 16 can receive 75%. Divorced spouses who qualify can receive the same benefit percentages as widows and widowers. For additional guidance, financial resources are available to help widows and widowers manage their finances.

Children who are unmarried and under 18 (or up to 19 if still attending primary or secondary school) or who are disabled and dependent receive 75% of the deceased’s benefit. Surviving dependent parents receive 82.5% of the benefit if one parent survives, and if both parents survive, each can receive 75%.

To apply for survivor benefits, you should notify the Social Security Administration (SSA) immediately following a person's death. While you cannot report a death or apply for survivor benefits online, you can contact the SSA at 1-800-772-1213 (TTY 1-800-325-0778), which is available from 8:00 a.m. to 7:00 p.m., Monday through Friday. Alternatively, you can use the Social Security Office Locator on the SSA website to find your local SSA office. Often, the funeral home will handle reporting the death if you provide them with the deceased's Social Security number. If the funeral home does not do this, you may need to report it yourself using the provided contact information.

Before applying for benefits, visit the SSA website to gather all necessary documents. Having these documents ready can help streamline the application process and expedite the process of receiving benefits.

Here we answered some frequently asked questions related to the Social Security application process.

Here's a list of websites and other sources of authoritative information about Social Security benefits:

• AARP: A nonprofit, nonpartisan organization dedicated to empowering individuals to make informed choices about aging. It offers resources on retirement, savings, Social Security and Medicare, aiming to improve the quality of life for older adults.
• Benefits.gov: The official source for information on all U.S. government benefits, helping people easily find and determine eligibility for various federal assistance programs.
• Centers for Medicare and Medicaid Services: Offers comprehensive information on Medicare and Medicaid services, including details on coverage, eligibility and enrollment procedures.
• National Committee to Preserve Social Security and Medicare: Dedicated to protecting Social Security and Medicare, this organization advocates for policy reform and educates the public on issues affecting senior citizens and their benefits.