What Social Security is and who it serves

Social Security is a federal insurance program run by the Social Security Administration (SSA). It provides monthly payments to workers who have reached retirement age, to people who cannot work because of a disability, and to the surviving family members of workers who have died. The program is funded through payroll taxes — both workers and employers contribute a percentage of wages during a worker's career.

Social Security is not a needs-based program. You do not have to prove you are poor to receive it. Instead, you receive benefits based on your work history and the age at which you claim. Most people think of Social Security as a retirement program, but it also covers disability and survivor benefits, which means it can pay you or your family members even if you have not yet reached retirement age.

The amount you receive depends on how much you earned during your working years and when you claim benefits. Someone who worked at higher wages will receive a higher monthly payment than someone who earned less. Someone who waits longer to claim will receive a higher monthly payment than someone who claims earlier.

Key Takeaways

  • Social Security provides monthly payments based on your work history, not your current income or savings.
  • You can claim retirement benefits as early as age 62, but your monthly payment will be permanently lower than if you wait until your full retirement age or later.
  • Disability and survivor benefits are also part of Social Security and do not require you to reach retirement age.
  • You can check your work record and estimated benefits by creating an account at ssa.gov, the official Social Security website.
  • The amount you receive is based on your highest 35 years of earnings, so gaps in work history lower your benefit amount.

Retirement benefits and when you can claim

You can claim Social Security retirement benefits as early as age 62, but the amount you receive will be reduced if you claim before your full retirement age. Your full retirement age depends on the year you were born and ranges from 66 to 67 for people born in 1943 or later. If you were born in 1960 or later, your full retirement age is 67.

If you claim at 62, your monthly payment will be roughly 30 percent lower than if you wait until your full retirement age. If you delay claiming past your full retirement age, your payment increases by about 8 percent for each year you wait, until age 70. This means someone who waits until 70 receives roughly 24 to 32 percent more per month than someone who claims at their full retirement age.

The choice of when to claim depends on your health, life expectancy, and financial needs. Someone who expects to live a long life may receive more total money by waiting. Someone who needs income now or has health concerns may receive more total money by claiming early. There is no single "right" answer — it depends on your situation.

Disability and survivor benefits

If you become unable to work because of a medical condition that is expected to last at least 12 months or result in death, you may be able to receive Social Security Disability Insurance (SSDI). You do not have to be retirement age to receive SSDI. The SSA will review your medical records and work history to decide whether your condition meets their definition of disability.

If you receive SSDI and reach your full retirement age, your benefit amount converts to a retirement benefit, but the monthly payment stays the same. If you die, your family members — including a spouse, ex-spouse, children under 19 (or 23 if in school), and parents who depended on you — may be able to receive survivor benefits based on your work record. The total amount paid to your family is capped at a percentage of what you would have received.

Applying for disability or survivor benefits is more complex than claiming retirement benefits, because the SSA must verify that you meet their criteria. The process typically takes several months, and many initial applications are denied. You can request a reconsideration, and if that is denied, you can request a hearing before an administrative law judge.

How your benefit amount is calculated

The SSA calculates your benefit based on your Primary Insurance Amount (PIA), which is derived from your highest 35 years of earnings. If you worked fewer than 35 years, the SSA counts zero-earning years, which lowers your average. The SSA adjusts your historical earnings for inflation and then calculates your average monthly earnings. This average is then run through a formula that replaces a higher percentage of lower earnings and a lower percentage of higher earnings.

You can see your own earnings record and an estimate of your future benefits by creating a my Social Security account at ssa.gov. The SSA sends this information to you automatically starting at age 60 if you do not create an online account. Your estimate assumes you continue working at your current earnings level until you claim, so the actual amount may be different if your earnings change.

If you have a gap in your work history — such as time spent raising children, caring for a family member, or dealing with illness — that gap counts as a zero-earning year and lowers your average. Some people are may be able to access for a Government Pension Offset or Windfall Elimination Provision, which can reduce their benefit if they also receive a pension from work that was not covered by Social Security, such as some government jobs.

Working while receiving Social Security

If you claim Social Security before your full retirement age and continue to work, the SSA will reduce your benefit by $1 for every $2 you earn above an annual limit. For 2024, that limit is $23,400. In the year you reach your full retirement age, the reduction applies only to earnings before the month you reach that age, and the reduction is $1 for every $3 earned above a higher limit.

Once you reach your full retirement age, you can earn as much as you want without any reduction to your benefit. This rule applies only to earned income from work — it does not apply to investment income, pensions, or other sources of income. If you claim early and then return to work at higher earnings, you can request that the SSA recalculate your benefit when you reach your full retirement age, which may result in a higher payment.

Medicare and Social Security

When you turn 65, you become may be able to access for Medicare, the federal health insurance program for people 65 and older. Medicare is separate from Social Security, but the two programs are often discussed together because most people claim Social Security around the same age they become may be able to access for Medicare. You must sign up for Medicare even if you do not claim Social Security yet, or you may face a permanent penalty on your premiums.

If you are already receiving Social Security, the SSA will automatically enroll you in Medicare Parts A and B when you turn 65. If you are not yet receiving Social Security, you will need to sign up for Medicare yourself through Medicare.gov or by visiting your local Social Security office. Some people delay claiming Social Security but claim Medicare on time to avoid the penalty.

How to claim and what documents you need

You can claim Social Security online through your my Social Security account at ssa.gov, by phone at 1-800-772-1213, or in person at your local Social Security office. You can create an online account and start the process at any time, even years before you plan to claim. The online application takes about 15 minutes.

To claim, you will need to provide your Social Security number, birth certificate, proof of citizenship or legal residency, and a bank account number for direct deposit of your benefit. If you are claiming as a spouse or survivor, you will also need to provide proof of your relationship to the worker. The SSA will verify most information directly with other government agencies, so you may not need to submit physical documents.

After you submit your application, the SSA will contact you if they need additional information. Processing typically takes two to three weeks if you apply online. Your first payment usually arrives within two months of your claim date. If you are claiming disability, the process takes longer — usually several months — because the SSA must review your medical evidence.

Frequently Asked Questions

Can I change my mind after I claim Social Security?

If you claimed within the last 12 months, you can withdraw your application and repay the benefits you received. This resets your claim date, and you can claim again later at a higher amount. After 12 months, you cannot withdraw, but you can request a one-time increase if you have reached your full retirement age and have not yet claimed your maximum benefit.

What happens to my Social Security if I move out of the United States?

You can receive Social Security benefits while living in most countries. However, if you are not a U.S. citizen, there are restrictions on how long you can live outside the U.S. and continue to receive benefits. You should notify the SSA before you move. Some countries have agreements with the U.S. that affect how benefits are calculated or paid.

How much does Social Security cost, and where does the money come from?

Social Security is funded through payroll taxes. In 2024, workers pay 6.2 percent of their wages and employers pay 6.2 percent, for a total of 12.4 percent. Self-employed people pay both portions. These taxes go into a trust fund that pays current benefits. The trust fund is projected to be depleted around 2034, after which incoming taxes would cover about 80 percent of scheduled benefits unless Congress changes the law.

Can I receive Social Security benefits based on my ex-spouse's work record?

Yes, if you were married for at least 10 years, are at least 62 years old, and are not currently married, you may be able to receive a benefit based on your ex-spouse's earnings record. Your benefit will be at most 50 percent of what your ex-spouse receives at their full retirement age. Your ex-spouse does not need to have claimed yet for you to claim on their record.

What if I disagree with the SSA's decision about my disability claim?

You can request reconsideration within 60 days of the denial letter. If reconsideration is denied, you can request a hearing before an administrative law judge. You can represent yourself or hire a lawyer. Many people find it helpful to work with a disability advocate or lawyer who specializes in Social Security cases, because the approval rate is higher with representation.