Social Security Work Credits
Published: 2/26/2024
Understanding work credits is crucial for anyone planning their retirement or considering Social Security benefits. This guide explains what work credits are, how to earn them, and why they matter for your Social Security eligibility.
What Are Work Credits?
Work credits are the building blocks of your Social Security eligibility. They are earned by working and paying Social Security taxes. This system ensures a minimum level of work contribution before qualifying for benefits.
How Many Work Credits Do I Need?
For Retirement Benefits
You need 40 work credits to qualify for retirement benefits. This typically requires at least 10 years of work.
For Survivor's Benefits
The number of work credits required for your family to qualify for survivor's benefits depends on your age at the time of death:
- Younger individuals need fewer credits
- The maximum required is 40 credits, regardless of age
For Disability Benefits
The required number of work credits for disability benefits varies based on your age when you become disabled. For more details, visit the official SSA website.
How Do I Earn Work Credits?
Basic Rules
- Work credits are earned by working and paying Social Security taxes
- You can earn up to 4 work credits per calendar year
- Partial credits cannot be earned
Before 1987
One work credit was earned for each calendar quarter with at least $250 in wages. These were also known as "quarters of coverage" (QCs).
After 1987
The system changed to a yearly basis:
- One credit is earned for each fixed dollar amount of earnings
- The required amount changes annually to keep pace with wage growth
- Example: In 2000, you would earn one credit for each $780 of earnings
Amount of Earnings Needed per Credit
The earnings required to earn a credit change yearly. Here's a table showing the amount needed for each year since 1978:
Example: In 1989, $500 earned one credit. With $1,700 in earnings that year, you would earn 3 credits. The extra $200 above $1,500 would not count towards a partial credit.
Qualifying for Spousal Benefits
Important note: To receive spousal benefits, you don't need to have earned work credits yourself. You only need to be married to someone who has earned enough work credits.