What Social Security is and who receives it

Social Security is a federal insurance program that pays monthly cash to workers who have retired, to people with disabilities, and to family members of workers who have died. You fund it through payroll taxes during your working years, and the program pays out based on your earnings record and age. It is not a savings account in your name — it is a shared pool that the current workforce funds, and current retirees draw from.

Most people think of Social Security as retirement money, but it actually has three main branches. Retirement benefits go to workers age 62 and older. Disability benefits go to workers under full retirement age who cannot work due to a medical condition expected to last at least 12 months. Survivor benefits go to the spouse, children, and parents of a worker who has died.

To receive any Social Security benefit, you must have earned enough work credits — roughly one credit per year of work, up to a maximum of four per year. Most people need 40 credits total, though younger workers who become disabled may need fewer. The Social Security Administration (SSA) keeps a record of your earnings and credits under your Social Security number.

Key Takeaways

  • Social Security pays monthly benefits to retirees age 62 and older, to workers with disabilities, and to family members of deceased workers, based on your earnings record.
  • You earn work credits through payroll taxes during employment, and most people need 40 credits to receive retirement or survivor benefits.
  • Your monthly payment amount depends on your earnings history and the age at which you start receiving benefits — waiting until age 70 increases your monthly payment significantly.
  • You can check your earnings record and estimated benefits anytime through your personal account at ssa.gov, which requires creating a login.
  • The SSA processes claims through local field offices, online, or by phone at 1-800-772-1213, and decisions typically take three to six months.

How your monthly payment is calculated

The SSA uses a formula based on your highest 35 years of earnings to calculate your Primary Insurance Amount (PIA) — the payment you would receive at your full retirement age. Full retirement age is 66, 67, or somewhere in between, depending on your birth year. If you were born in 1960 or later, your full retirement age is 67.

The timing of when you start receiving benefits changes your monthly payment. If you start at 62, your payment is permanently reduced — roughly 30 percent less than at full retirement age. If you wait until 70, your payment is permanently increased — roughly 24 percent more per year of delay. This means someone who waits until 70 will receive a significantly higher monthly check for the rest of their life, but will have foregone payments during those eight years.

Your spouse and children may also receive benefits based on your earnings record, even if they did not work. A spouse can receive up to 50 percent of your full retirement age benefit, and each child can receive up to 75 percent, though the total paid to your family has a cap. If you die, your family members may receive survivor benefits instead.

When you can start receiving benefits

You can start receiving retirement benefits as early as age 62, but the earliest age does not mean the best age. Starting at 62 locks in a permanently lower payment. Many people wait until full retirement age (66 or 67) or even 70 to maximize their lifetime benefit, especially if they expect to live into their 80s or beyond.

If you continue working while receiving benefits before full retirement age, your benefits are reduced by $1 for every $2 you earn above an annual limit. In 2024, that limit is $23,400, though it changes yearly. Once you reach full retirement age, there is no reduction regardless of how much you earn.

For disability benefits, there is no age requirement — you can receive them at any age if you meet the medical criteria and have enough work credits. The SSA uses a strict definition: your condition must prevent you from doing substantial work and is expected to last at least 12 months or result in death.

How to check your earnings record and estimate your benefits

The SSA maintains a record of every year you worked and the wages you earned. You can view this record and see an estimate of your future benefits by creating a personal account at ssa.gov. The account is free and requires you to verify your identity through an online process or by visiting a local SSA office.

Once you have an account, you can see your earnings history year by year, check how many work credits you have earned, and view an estimate of your retirement, disability, and survivor benefits at different ages. This estimate is based on your current earnings record and assumes you continue working at your recent average pace until retirement.

You should review your earnings record every few years to catch errors. If you spot a mistake — a year where you earned money but it is not showing, or an amount that is wrong — you can report it to the SSA. Corrections are easier to make while you are still working and have recent pay stubs to prove the amount.

How to start receiving benefits

You can begin the process three months before you want your benefits to start. You have three main routes: online at ssa.gov, by phone at 1-800-772-1213 (Monday through Friday, 7 a.m. to 7 p.m. Eastern time), or in person at your local SSA field office. Online is usually fastest if you have a personal account set up.

You will need to provide proof of identity (a driver's license or passport), proof of citizenship or legal residency (a birth certificate or naturalization papers), and proof of age. If you are explore for survivor or family benefits, you will also need documents showing your relationship to the worker — a marriage certificate, birth certificate, or adoption papers.

The SSA typically makes a decision within three to six months. If you are approved, your first payment arrives the month after you are deemed may be able to access. If you are denied, you receive a written explanation and can request reconsideration or appeal the decision.

What happens if you disagree with a decision

If the SSA denies your claim or you believe your benefit amount is wrong, you have the right to challenge the decision. The process has four levels: reconsideration (the SSA reviews your case again), a hearing before an administrative law judge, an appeal to the Appeals Council, and federal court.

You must request reconsideration within 60 days of receiving the SSA's decision. At the hearing stage, you can present new evidence and testify. Many people hire a lawyer or representative at this point — they are paid only if you win, and their fee is capped by law at 25 percent of your back pay, up to $7,200.

The entire appeal process can take one to three years, depending on how busy the courts are. During this time, if you eventually win, you receive all the money owed to you back to the date you originally filed, not just from the date your appeal was approved.

How Social Security fits into retirement planning

Social Security replaces roughly 40 percent of pre-retirement income for an average earner, though the percentage is higher for lower earners and lower for higher earners. It is designed to be a foundation, not a complete retirement income. Most financial advisors recommend having additional savings, pensions, or investment income to cover the rest.

The timing of when you start benefits should factor in your health, family history, whether you plan to keep working, and how much other retirement income you have. Someone in excellent health with substantial savings might benefit from waiting until 70. Someone in poor health or with limited savings might benefit from starting at 62.

You can also coordinate benefits with a spouse. If one spouse has significantly higher lifetime earnings, the lower-earning spouse might delay their own benefit to receive a spousal benefit instead, which can increase the household total. The rules for this changed in 2015, so if you were born after January 1, 1954, your options are more limited than they were for earlier generations.

Frequently Asked Questions

Can I receive Social Security if I did not work in the United States?

You must have earned at least 40 work credits, which requires roughly 10 years of U.S. employment. If you worked in another country, the SSA may count some of that time under totalization agreements with certain countries. Contact the SSA to ask whether your foreign work can be credited.

What if I made a mistake on my process?

Contact the SSA as soon as you notice the error. If you have not yet started receiving benefits, the mistake can usually be corrected before your first payment. If you have already started, the SSA can adjust your payments going forward, though correcting past overpayments may take time.

Does getting Social Security affect my taxes?

Depending on your total income, up to 85 percent of your Social Security benefits may be subject to federal income tax. You do not pay Social Security or Medicare taxes on benefits. Some states also tax Social Security, though many do not. Use the SSA's tax withholding calculator or consult a tax professional to estimate your tax liability.

Can I change my mind after I start receiving benefits?

Yes, but only within limits. If you started benefits within the past 12 months, you can withdraw your process and repay all benefits received, which resets your record. After 12 months, you cannot withdraw, but you can suspend benefits at full retirement age or later, which stops payments and allows your benefit to grow until age 70.

What if I am still working when I turn 62?

You can start receiving benefits at 62 even if you are still working, but your benefits will be reduced if you earn above the annual limit ($23,400 in 2024). Once you reach full retirement age, the reduction stops. Many people delay starting benefits until they actually retire to avoid this reduction.