Broker Check

Social Security - Earning Work Credits & Primary Insurance Amount

When you work and pay Social Security taxes, you earn up to a maximum of four “credits” each year. Credits are based on your total wages and self-employment income during the year, no matter when you did the actual work. You might work all year to earn four credits or earn enough for all four credits in a month. In 2023, you must earn $1,640 in covered earnings to get one Social Security work credit and $6,560 to get the maximum four credits for the year.

You need 40 credits — essentially ten years of work — to qualify for Social Security retirement benefits. If you stop working before you have enough credits to be eligible for benefits, your credits will stay on your record. If you return to work later, you can add more credits to qualify. You will not qualify for retirement benefits if you do not have enough credits. Should you not have enough Social Security credits of your own, you may be able to get spousal benefits if you are at least 62 years of age and your spouse is receiving retirement or disability benefits. You can also qualify for Medicare at age 65. You can also be eligible to receive a spousal no matter your age if you are caring for your spouse’s child under age 16 or disabled.

The dollar amount of your Social Security benefit is based on your lifetime earnings. Your actual earnings are adjusted or “indexed” to account for changes in average wages during your lifetime. Then Social Security calcu­lates your average indexed monthly earnings during the 35 years you earned the most and applies a formula to these earnings to arrive at your basic benefit, or “primary insurance amount (PIA). The PIA is how much you would receive at your full retirement age, depending on your date of birth. Finally, the age at which you claim your benefits determines your monthly payment.

At Carr Wealth Management, LLC, anyone who sets goals for themselves qualifies to be a client. Whether you need help creating a comprehensive financial plan or need advice on individual matters, we can help.  Choosing the best strategy for maximizing social security benefits is essential to planning for your future. Please contact us by email or phone us at (925) 484-1671 to schedule a no-charge consultation or if you have a question about Social Security Benefits. 

Have a Question

Thank you!