What are Social Security Benefits & Who Qualifies for Them

Whether you’re a retired worker, disabled person—or their spouse, dependent child, or surviving family member—the federal government offers a variety of social programs that may be able to provide financial assistance. One common example is the Social Security program. Overseen by the Social Security Administration (SSA), this program distributes Social Security benefits that provide income to qualified recipients who earn enough credits by paying into the program over the course of their lifetime.

However, not everyone qualifies for this form of government assistance. Throughout this post, we’ll go over the Social Security definition, as well as who qualifies for Social Security, how Social Security benefits work, and how to begin collecting Social Security benefits. Read end-to-end to learn all about this program and how you might benefit from it now or in the future, or you can jump to a section of your choice using the links below.

What Are Social Security Benefits?

The Social Security Administration (SSA) was established by President Franklin Delano Roosevelt in 1935 after the Great Depression left millions of Americans penniless. The Social Security definition states that Social Security is any government program that provides financial assistance to individuals with little to no income. This New Deal program was aimed to help the most vulnerable citizens in society, including the elderly, disabled, and their children and widows, who might otherwise end up impoverished.

Today, the SSA has grown to become an independent agency within the federal government. It’s tasked with overseeing social insurance programs that provide retirement, disability, and survivor benefits. So, what are Social Security benefits? The Social Security benefits definition goes as follows:

Social Security taxes pay for three types of Social Security benefits: retirement, disability, and survivor benefits. These payments come from the Social Security Trust Fund, and go to those eligible for retirement or disability benefits, along with other members of your family.

Social Security benefits serve as partial replacement income to help out-of-work populations stay financially afloat if they’re retired or disabled.

According to the most recent data from the SSA, it’s stated that:

  • 65 million Americans will receive over one trillion dollars in Social Security benefits in 2020
  • 2 percent of total benefits paid go to retired workers and their dependents
  • 5 percent of total benefits paid go to disabled workers and their dependents
  • 3 percent of total benefits paid go to survivors of deceased workers
  • Roughly nine out of ten elderly individuals aged 65 and older receive Social Security benefits

As you can see, a majority of Social Security benefits go to elderly retired citizens. As you’re approaching retirement, it’s important to create a retirement planning budget. While Social Security benefits do provide partial income, often, this isn’t enough to afford many retiree’s current lifestyle. There are a variety of ways to support yourself during your golden years, such as using credit cards to fund retirement, placing funds in individual retirement accounts and 401(k) accounts, or by diversifying your portfolio with stocks and bonds.

Saving for retirement is more important than ever, as the SSA is slowly losing funds to provide full benefits to qualified recipients. One of the biggest dangers of not saving for retirement is living longer than you think and not having a backup plan that can financially support you for 20+ years on a limited income with small savings.

According to the latest SSA Trustees’ annual report, the retirement program’s costs will begin to exceed the amount of money they’re bringing in, starting in 2020. The Old-Age and Survivors (OASI) Trust Fund, which provides the Social Security benefits to retirees and their survivors, will be able to pay scheduled benefits until 2034. After that, the program will be required to dip into the OASI Trust Fund to make up the difference, which will only be able to pay about 76 percent of scheduled benefits until 2093. The Disability Insurance (DI) Trust Fund, which pays the Social Security disability benefits, will be able to pay scheduled benefits until 2065.

However, this doesn’t mean you’re not going to get your Social Security benefits. Lawmakers have a variety of choices they can make to help ensure the program is able to provide assistance to retirees, disabled people, and their survivors, such as raising taxes, raising the eligibility age to receive benefits, and lowering the amount of money recipients can receive in monthly payments.

How Do Social Security Benefits Work?

The Social Security programs and all its benefits are funded by payroll taxes that come from the Federal Insurance Contributions Act (FICA) and the Self Employed Contributions Act (SECA) (for self-employed workers).

When you’re employed, the IRS collects a 6.2 percent Social Security tax on your earnings that goes into the OASI Trust Fund and the DI Trust Fund, up to a maximum amount, which is $137,700 for 2020. On top of that, your employer also pays a 6.2 percent Social Security tax on your earnings. If you’re self-employed, however, you’re required to pay the entire 12.4 percent Social Security tax yourself.

The money you contribute to the Social Security Trust Fund each month doesn’t go into your own personal account that you can theoretically withdraw from in the future. Instead, your money goes toward benefits for current retirees, disabled people, and their survivors.

How Do You Qualify for Social Security Benefits?

Who qualifies for Social Security? In order to qualify for Social Security benefits, you typically must have worked for at least ten years. While you work, you pay into the Social Security program and earn “credits,” also called quarters, over time. As of 2020, you earn one credit for each $1,140 of earnings, up to a maximum of four credits per year, which is adjusted every year to account for inflation. To receive your full benefit amount, you must accumulate 40 credits.

Qualifying for disability benefits can be difficult, as the SSA enforces strict qualifying guidelines. In order to qualify for disability benefits, you must:

  • Meet Social Security’s definition of disability, which is ultimately anyone who is unable to work for a year or more because of a disability
  • Have worked long enough and recently enough in jobs covered by Social Security

Throughout your working career, the SSA keeps tabs on your earnings. They then compute your average indexed monthly earnings (AIME) by:

  • Taking your top 35 highest-earning years
  • Summing the indexed earnings
  • Dividing the total amount by the total number of months in those years, and
  • Rounding the average to the next lowest dollar amount


As of April 2020, the average Social Security retirement benefit was about $1,510 per month, which equals $18,120 per year. For disabled workers, the average Social Security disability benefit was about $1,259 per month, which equals $15,108 per year. At this time, there were over 54.7 million retired workers and their dependents and survivors receiving Social Security retirement benefits, and over 9.9 million disabled workers and their spouses and children receiving Social Security disability benefits.

It’s important to take note that Social Security benefits typically replace about 40 percent of your pre-retirement earnings. With that said, you’ll likely want to consider saving for retirement early. There are numerous ways you can begin saving for retirement, such as individual retirement accounts, 401(k) accounts, and through investing.

You can use the Social Security Administration’s retirement calculator to see how much you can earn through monthly benefits based on your Social Security earnings record.

When Can You Collect Social Security?

Eligible recipients can claim Social Security retirement benefits as early as age 62, but in order to be eligible for the highest benefit amount, you must wait until your full retirement age (FRA). The full retirement ages for receiving full Social Security benefits goes as follows:

  • 65 years old if you were born in 1937 or earlier
  • 65 and 2 months if you were born in 1938
  • 65 and 4 months if you were born in 1939
  • 65 and 6 months if you were born in 1940
  • 65 and 8 months if you were born in 1940
  • 65 and 10 months if you were born in 1942
  • 66 if you were born between 1943 and 1954
  • 66 and 2 months if you were born in 1955
  • 66 and 4 months if you were born in 1956
  • 66 and 6 months if you were born in 1957
  • 66 and 8 months if you were born in 1958
  • 66 and 10 months if you were born in 1959
  • 67 if you were born in 1960 or later

Individual workers and disabled individuals aren’t the only ones who can collect Social Security. If you’re a spouse, dependent, divorced spouse, or another survivor, you may be able to receive survivor or spousal benefits. Certain family members might be eligible to receive monthly benefits, such as:

  • A widow or widower as early as 60 or older, or age 50 or older if disabled
  • A divorced spouse, who was married for 10 years or longer and hasn’t remarried
  • Surviving spouses caring for children younger than 16 or disabled
  • Children under the age of 16
  • Children younger than 19 enrolled in elementary or secondary school
  • Surviving parents age 62 or older who were depended on you for at least half of their support

Surviving spouses and children may also receive a one-time lump-sum death payment of $255 if they meet certain requirements, such as living in the same household as the worker who died. As for the amount, your spouse or children can receive anywhere between 71.5 percent to 100 percent of your Social Security benefits, up to a maximum of 150 and 180 percent of the basic benefit rate.

Key Takeaways on Social Security Benefits

Social Security has been helping millions of Americans stay financially stable through monthly benefit payments for decades. What started as a progressive program to help Americans recover after the Great Depression, became one of America’s most cherished social programs. Below are some important key takeaways on Social Security benefits:

  • There are three types of Social Security benefits, including retirement, disability, and survivor benefits. These benefits provide partial supplemental income to qualifying individuals, such as eligible retirees, disabled people, and their spouses, children, and survivors.
  • To qualify for full benefits on an individual’s own record, an individual must pay Social Security taxes while they work and earn 40 credits.
  • The amount a recipient receives depends on a few factors, such as how much they earn, the year they were born, and the age they begin claiming their Social Security benefits.
  • You can begin collecting Social Security benefits at age 62. However, collecting before you reach full retirement age will reduce the monthly amount of your benefits.


SSA.gov; Benefits | SSA.gov; Glossary of Social Security Terms | SSA.gov; A “Snapshot” | SSA.gov; Fact Sheet | SSA.gov; 2020 Annual Report | IRS.gov; Social Security and Medicare Withholding Rates | SSA.gov; FICA and SECA Taxes | SSA.gov; how You Earn Credits | SSA.gov; Social Security Benefit Amounts | SSA.gov; Benefits Paid By Type of Beneficiary | SSA.gov; Calculators | SSA.gov; Disability Benefits | SSA.gov; Retirement Benefits | SSA.gov; Survivors |

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