What Are Social Security Credits?

Each year you work and pay into the Social Security system, you accrue Social Security credits. The Social Security Administration (SSA) uses these credits, along with your age, to determine your eligibility for various types of benefits.

How Do Social Security Credits Affect Future Benefits?

Credits determine your eligibility for benefits such as retirement, disability, Medicare, or survivorship benefits for your family. They do not impact the amount of benefits, which is based on your earnings.

How to Earn Social Security Credits

You earn credits by working and paying Social Security taxes, regardless of whether you’re self-employed or employed full-time or part-time. You can earn up to four credits each year, essentially one per quarter. For 2024, every $1,730 earned equals a credit. If you earn $6,920 in the year, you’ll hit the maximum of four credits.

How to Find Out How Many Credits You Have

To see how many credits you’ve amassed, create an online account on the SSA’s website and view your statement. You can also call the SSA at 800-772-1213.

What If You Don’t Have Enough Social Security Credits?

Unfortunately, if you don’t have enough credits, the SSA will not pay you any benefits. It’s crucial to track your credits and ensure you meet the minimum requirements.

Types of Benefits and Required Credits

Retirement Benefits

To be eligible for Social Security retirement benefits, you must earn at least 40 credits in your lifetime. This is achievable in 10 years of working.

Disability Benefits

For Social Security Disability Insurance (SSDI), the amount of credits required is based on the age at which you developed a disability. For example, if your disability developed before age 24, you need to have earned at least six credits in the prior three years.

Survivors Benefits

If you pass away, your immediate family members may be eligible for Social Security survivors benefits payments. The amount of credits required depends on your age when you pass away.

Medicare

Once you or your spouse reach 40 Social Security credits from working, you’re likely eligible for Medicare and won’t have to pay premiums for Part A (hospital insurance).

How to Maximize Social Security Credits

The only way to earn credits is by working and paying Social Security taxes. Those who work consistently for at least 10 years should have no problem reaching the minimum. If you took long periods off work or were in a job that treats Social Security differently, it’s smart to log in to or make an account on the SSA’s website and see where your credit total stands.

Delaying taking Social Security retirement benefits increases your monthly payments, so if you can afford to wait several years past the minimum age, you’ll get bigger checks. The month you choose to start receiving benefits can also make an impact.

Prepare for Retirement Elsewhere

Monthly Social Security checks can be a critical way to support yourself during retirement, but it’s only meant to replace part of your income. It’s ideal to keep debt in check and save for retirement in investment accounts like 401(k)s and IRAs so you can live comfortably when you stop working.

Contact O1ne Mortgage for Your Mortgage Needs

At O1ne Mortgage, we understand the importance of financial security and planning for the future. Whether you’re looking to buy a new home or refinance your current mortgage, our team of experts is here to help. Call us today at 213-732-3074 for any mortgage service needs. Let us help you secure your financial future.