In the United States, there are two minimum requirements to start collecting a Social Security benefit. These two requirements are to be age 62 and to have earned 40 work credits. These work credits are earned by working a full year. They are not lost when you stop working, so when you return to work these credits are added to the amount you had previously. In this way, reaching the minimum of 40 work credits is possible without the need to work a long time in a row. Thanks to this we can obtain our Social Security retirement.
Well, for the year 2023 there are changes in this aspect. If up to now the value of the work credit has been $1,510, starting next year we will see an increase of up to $1,640 for each work credit. This will mean that we will have to earn more money to achieve our goal with Social Security. Each year worked earns 4 credits, so the minimum to get a benefit is 10 years worked. This does not assure us a very large subsidy, but it does assure us a minimum benefit to be able to pay our monthly bills.
Although it is true that by paying more taxes we will get a larger pension in the future, in this case it can be a negative aspect. This increase in work credit requirements does not imply an increase in Social Security benefits. We are talking about the minimum, so you cannot earn more with this new law.
How many dollars do I have to earn to get Social Security work credits?
As we have already commented above, in order to get a work credit, it is mandatory to pay $1,510 in taxes in this year. In 2023, this amount will increase to $1,640. Each year working we will get 4 credits at most, but for this it is necessary to reach up to $6,560 in taxes. This can be very difficult for some people, since not all salaries are equal. But if we want to have good Social Security in retirement, we must earn the maximum salary possible.
For that reason, follow these tips if you want to reach the maximum benefit during your Social Security years:
- Get a high salary. The better your salary, the better your Social Security. The minimum earnings minimum of 1,640 per credit ensures a minimum benefit, but that figure is improvable.
- Work for 35 years. While it’s true that the minimum to get a Social Security payment is 10 years worked, if you don’t work 35 years minimum you can’t get the best possible benefit.
- Delay your retirement age. From the age of 62 we can ask for retirement, but it is not obligatory. Requesting the benefit at 67 will ensure a better monthly check.
Taking into account these three aspects and the small increase in the price of the work credit, we can now prepare a plan regarding our Social Security retirement in the future.