What Are Social Security Benefits?

Social Security benefits are payments made to qualified retired adults and people with disabilities, and to their spouses, children, and survivors. Social Security—officially the Old-Age, Survivors,⭕ and Disability Insurance (OASDI) program in the U.S.—is a comprehensive federal benefits program designed to provide partial replacement income for retired adults and their spouses, those whose spouse or qualifying ex-spouse has died, and people with disabilities. Under specified conditions, it also supports the children of beneficiaries.

How Social Security Benefits Work

President Franklin Roosevelt signed the original 澳洲幸运5官方开奖结果体彩网:Social Security Act into law in 1935. The current law, after a number of amendments, encompasses several social insurance and social welfare programs, including the issuance of Social Security benefits. Benefits are determined by a specific set of criteria issued by the 澳洲幸ಌ运5官方开奖结果体彩网:Social Security Administration (SSA).

Payroll taxes under the 澳洲幸运5官方开奖结果体彩🧔网:Federal Insurance Contributions Act (FICA) or the 澳洲幸运5官方开奖结果体彩网:Self Employed Contributions Act (S♌ECA) (for self-employed individuals) fund Social Security and all of its benefits.

The Internal Revenue Service (IRS) collects tax deposits and formally entrusts them to the 澳洲幸运5官方开奖结果体彩网:Social Security Trust Fund, which is actually made up of two separate funds: the 澳洲幸运5官方开奖结果体彩网:Old-Ag༒e and Survivors Insurance (OASI) T🎶rust Fund and the 澳洲幸运5官方开奖结果体彩网:Disability Insurance Trust Fund.

How 💙Do You Qualify for Social Security Benefits?

You qualify for Social Security old age (or retirement) benefits by paying into the program during your working years. Full insurance is based on accumulating 40 quarters 澳洲幸运5官方开奖结果体彩网:or "credits" from covered wages, and a worker can earn up to four credits a year. One credit is awarded for every $1,730 in earnings for 2024 (and $1,810 in 2025), an amount that is adjusted annually to keep up with inflation.

A 澳洲幸运5官方开奖结果体彩网:payroll tax cap sets the maximum amount of earned income that is subject to the Social Security payroll tax. The payroll tax cap in 2024 is $168,600 (and rises to $176,100 in 2025).

The SSA keeps track of your earnings throughout your career, indexes each year's total earnings, and uses the 35 highest-earning years to determine your澳洲幸运5官方开奖结果体彩网: average indexe✱d monthly ear🦩nings (AIME). Next, your AIME is used to arrive at your 澳洲幸运5官方开奖结果体彩网:primary insurance amount (PIA), the monthly amount you can begin to collect when you reach 澳洲幸运5官方开奖结果体彩网:full retirement age.

For individuals born in 1938 or later, the full retirement age gradually increases from 65 until it hits 67 for those born after 1959. You can collect Social Security retirement benefits 澳洲幸运5官方开奖结果体彩网:at age 62, but the amount of the benefit will be reduced to compensate for receiving it earlier and, presumably, for a longer period of time.

In 2024, the maximum monthly Social Security payment for retired workers is $3,822, rising to $4,018 in 2025. The SSA’s retirement calculators can help you determine your full retirement age, the SSA’s estimate of your life expectancy for benefit calculations, rough estimates of your retirement benefits, actual projections of your retirement benefits based on your work record, and more. Retired adults with non-FICA or SECA-taxed wages will require additional helꦜp because rules for those individuals are more compl🎀ex.

Types of Social Security Benefits

Spousal Benefits

Spouses who didn’t work or who didn’t earn enough credits to qualify for Social Security on their own can receive benefits starting at age 62 based on their spouse’s work record. Similar to claiming benefits on one's own record, 澳洲幸运5官方开奖结果体彩网:a spouse's benefit will be reduced if they claim benefits before reaching full retirement age. The highest spousal benefit someone can receive is half the benefit their spouse is entitled to at their full retirement age.

Survivor Benefits

When a spouse dies, the surviving spouse is entitled to file for a survivor's benefit as early as age 60. The benefit will be reduced if they file prior to reaching their full retirement age. They are permitted to switch to their own benefit at any point they wish starting at age 62 and through age 70 if that benefit is higher than the survivor's benefit.

People who were married for 10 years or longer—and are divorced and have not remarried—are entitled to collect the spousal benefit and the spousal survivor benefit. The rules are complicated so review💙 them carefully💟.

Special Considerations

If an individual taxpayer's income exceeds $25,000, or a married couple filing jointly has income that's more than $32,000, they will be required to pay taxes on their Social Security benefits.

The portion of benefits that is subject to taxation depends upon income level, but no one pays taxes on more than 85% of their Social Security benefits, regardless of income. Benefits received due to disability are, in most cases, tax-free. If your child receives dependent or survivor benefits, this money does not count towards your taxable income.

The Bottom Line

Social security benefits are part of the safety net that provides for Americans who are unable to work. Most Americans interact with the system when they reach retirement age, but social security also provides for people who are disabled. Social security benefits vary depending on your income and age at retirement, so it is important to understand how these factors can affect your benefits.