Social Security is a federal insurance program that pays monthly cash to workers who retire, become disabled, or die

Social Security is not a savings account or a welfare program. It is an insurance system run by the federal government. You and your employer pay into it through payroll taxes while you work. In return, you receive monthly payments if you reach retirement age, become unable to work due to disability, or if you are a family member of someone who dies.

The program has three main parts: retirement benefits for workers age 62 and older, disability benefits for workers of any age who cannot work due to a medical condition, and survivor benefits for family members of workers who have died. The amount you receive depends on how much you earned during your working years and when you start taking benefits.

Social Security is funded by a payroll tax of 12.4 percent on wages (split between employee and employer). You can see how much you have paid in and what your future benefits might be by creating an account at ssa.gov and viewing your Social Security Statement.

Key Takeaways

  • Social Security pays monthly benefits to retired workers, disabled workers, and family members of deceased workers based on earnings history.
  • You fund Social Security through payroll taxes while working, and the amount you receive later depends on your earnings record and when you claim.
  • Retirement benefits can start as early as age 62, but waiting until age 70 results in a significantly higher monthly payment.
  • Disabled workers and their family members can receive benefits at any age if the disability meets Social Security's strict medical definition.
  • Your Social Security Statement at ssa.gov shows your earnings history and estimates what you may receive at different claiming ages.

Retirement benefits and when you can claim them

You can claim Social Security retirement benefits as early as age 62, but the monthly payment will be permanently reduced. Your full retirement age — the age at which you receive your full benefit amount — depends on the year you were born. For people born in 1960 or later, full retirement age is 67. If you were born between 1943 and 1954, it is 66.

If you wait past your full retirement age to claim, your monthly benefit increases by about 8 percent per year until age 70. This means claiming at 70 results in a significantly larger monthly payment than claiming at 62, but you receive fewer total payments over your lifetime if you die early. The choice depends on your health, family history, and financial situation.

You must have worked and paid Social Security taxes for at least 10 years (40 quarters) to be may be able to access for retirement benefits. The Social Security Administration uses your 35 highest-earning years to calculate your benefit amount. If you worked fewer than 35 years, zeros are included in the calculation, which lowers your benefit.

Disability benefits for workers who cannot work

If you become unable to work due to a medical condition, you may receive Social Security Disability Insurance (SSDI) at any age. The condition must be expected to last at least 12 months or result in death. Social Security's definition of disability is strict: you must be unable to do any substantial work, not just your current job.

To may have access to for SSDI, you must have worked long enough and recently enough to have earned enough credits. The number of credits required depends on your age when you become disabled. A younger worker needs fewer credits than an older worker. You can work part-time and still receive benefits, but your earnings cannot exceed a monthly limit set by Social Security (the limit changes each year).

The process process for disability can take several months. Many people are denied on their first process. If you are denied, you can request reconsideration, file an appeal, or request a hearing before an administrative law judge. Working with a disability representative or lawyer who specializes in Social Security cases can improve your chances, though they charge a fee only if you win.

Survivor benefits for family members

When a worker who paid into Social Security dies, their family members may receive monthly payments. Survivor benefits go to the worker's spouse (at any age if caring for a child under 16, or at age 60 or older), unmarried children under 19 (or up to age 19 if still in high school), and dependent parents age 62 or older.

The total amount paid to all family members combined cannot exceed a family maximum, which is usually between 150 and 180 percent of what the deceased worker would have received. If multiple family members are receiving benefits, each person's payment is reduced proportionally to stay within the family maximum.

You must report the worker's death to Social Security. Family members should contact the Social Security Administration at 1-800-772-1213 or visit a local Social Security office to report the death and ask about survivor benefits. You will need a death certificate and proof of relationship.

How much you receive each month

Your monthly benefit amount is based on your Primary Insurance Amount (PIA), which is calculated from your earnings record. Social Security uses a formula that weights your highest-earning years more heavily. The formula is progressive, meaning lower earners receive a higher percentage of their pre-retirement earnings as benefits.

The average retirement benefit in 2024 is around $1,900 per month, but this varies widely. A worker who earned the maximum taxable wage throughout their career and waits until age 70 to claim will receive a much higher benefit than someone who earned less or claimed earlier. You can see your personalized estimate by creating a my Social Security account at ssa.gov.

Your benefit amount is adjusted each year for inflation using the Cost of Living Adjustment (COLA). This means your monthly payment increases when inflation rises, though it does not decrease if inflation is negative. The COLA is announced in October and takes effect in January.

Working while receiving Social Security

If you claim retirement benefits before your full retirement age and continue working, your benefits are reduced if your earnings exceed a limit. In 2024, the limit is $23,400 per year. For every $2 you earn above the limit, $1 is withheld from your benefits. Once you reach your full retirement age, there is no earnings limit and your benefits are not reduced.

If you are receiving disability benefits, you can work part-time and earn up to a monthly limit (called Substantial Gainful Activity, or SGA). The limit changes each year. If you earn more than the limit, your disability benefits stop, though you may be able to continue receiving benefits during a trial work period while you test your ability to work.

Some people delay claiming retirement benefits while they continue working in order to receive a higher monthly payment later. Others claim early and work part-time, accepting the reduced benefit in exchange for income now. The right choice depends on your circumstances.

How to check your earnings record and get estimates

Your Social Security Statement shows your earnings history, the taxes you have paid, and estimates of what you may receive at different ages. You can view your statement by creating a free account at ssa.gov. The statement is updated once per year.

The estimates on your statement assume you will continue working and earning at your current level until you claim benefits. If you plan to retire early, work part-time, or have a significant change in income, the estimate may not be accurate. You can adjust the earnings assumption to see how different scenarios affect your benefit.

If you find an error in your earnings record, you should report it to Social Security as soon as possible. Errors can lower your benefit amount. You will need documents like W-2 forms or tax returns to prove your actual earnings. Social Security has a limited time to correct errors, so do not delay.

Frequently Asked Questions

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

You must have worked and paid Social Security taxes for at least 10 years to receive retirement benefits. If you worked in another country, some countries have agreements with the United States that allow work credits to count toward Social Security. Contact Social Security to ask whether your foreign work can be credited.

What happens to my benefits if I get married or divorced?

A spouse can receive benefits based on the other spouse's earnings record, even if they did not work. An ex-spouse can also receive benefits if the marriage lasted at least 10 years. These benefits do not reduce the worker's own benefit. If you remarry, you may lose ex-spouse benefits, depending on the timing.

How do I report a change in my income or living situation?

You can report changes online through your my Social Security account, by calling 1-800-772-1213, or by visiting a local Social Security office. Changes that matter include earning more than the limit while receiving retirement benefits, changes in your living arrangement if you receive SSI, or a change in your medical condition if you receive disability benefits.

What if I think Social Security made a mistake on my claim?

You can request reconsideration within 60 days of the decision. If you disagree with reconsideration, you can request a hearing before an administrative law judge. You have the right to representation at a hearing. Many people hire a lawyer or representative who specializes in Social Security appeals.

Can I receive both Social Security and a pension from a job where I did not pay Social Security taxes?

If you receive a pension from a government job where you did not pay Social Security taxes, your Social Security retirement or survivor benefits may be reduced under the Government Pension Offset or Windfall Elimination Provision. The reduction depends on when you were born and how much your pension is. Contact Social Security for a specific calculation.