Your Complete Guide to Social Security!

Social Security, Medicare & Government Pensions

Get the Most out of Your Retirement & Medical Benefits

Your complete guide to Social Security retirement and medical benefits

Social Security, Medicare, SSI and more explained in this all-in-one resource that gets you the most out of your retirement benefits.  Learn all about:

  • Social Security benefits (including current rules on spousal and dependents benefits)
  • Medicare & Medicaid
  • veterans, FERS, and CSRS benefits

Completely updated for 2024. See below for a full product description.

  • Product Details
  • The rules for claiming Social Security benefits have changed (again). Claiming retirement benefits early affects dependents and survivors benefits differently. Learn this and more with Social Security, Medicare & Government Pensions—completely updated for 2024.

    Social Security benefits. Figure out how to get retirement, disability, dependents, and survivors benefits, or Supplemental Security Income (SSI). Decide whether it’s best to claim benefits early, at full retirement age, or not until you turn 70—and how to time your claims so you and your spouse get the best benefits.

    Medicare & Medicaid. Learn how to qualify for and enroll in both programs, including Medicare Part D drug coverage.

    Medigap insurance & Medicare Advantage plans. Compare Medigap and Medicare Advantage plans, and choose what’s best for you.

    Government pensions & veterans benefits. Discover when and how to claim the benefits you have earned.

    What’s New in 2024?

    • Lower drug costs under Part D
    • New Medicare costs and Social Security amounts for 2024, and
    • Changes to some Medigap plans.

    Whether you’re looking for yourself or helping a parent, you’ll find valuable information here to help get the benefits you’ve earned.

    “ Guide[s] you through the maze of Social  Security and Medicare in simple English….”—Wall Street Journal

    “The inside scoop on how to get the most out of the current system…”—Accounting Today


    Number of Pages
  • About the Author
  • Table of Contents
  • Introduction:
    Your Social Security, Medicare & Government Pensions Companion

    • Locating Chapters That Fit Your Needs

    1.  Social Security: The Basics

    • History of Social Security
    • Social Security Defined
    • Eligibility for Benefits
    • Earning Work Credits
    • Determining Your Benefit Amount
    • Your Social Security Earnings Record
    • U.S. Citizens’ Rights to Receive Benefits While Living Abroad
    • Receiving Benefits as a Noncitizen

    2. Social Security Retirement Benefits

    • Work Credits Required
    • Timing Your Retirement Benefits Claim
    • The Amount of Your Retirement Check
    • Working After Claiming Early Retirement Benefits

    3. Social Security Disability Benefits

    • Who Is Eligible
    • What Is a Disability?
    • Amount of Disability Benefit Payments
    • Collecting Additional Benefits
    • Continuing Eligibility Review
    • Returning to Work

    4. Social Security Dependents Benefits

    • Who Is Eligible
    • Calculating Dependents Benefits
    • Eligibility for More Than One Benefit
    • Working While Receiving Benefits
    • Government Pension Offset

    5. Social Security Survivors Benefits

    • Work Credits Required for Eligibility
    • Who Is Eligible
    • Amount of Survivors Benefits
    • Eligibility for More Than One Benefit
    • Working While Receiving Benefits
    • Government Pension Offset

    6. When to Claim Social Security Benefits, and Which One to Claim

    • Considerations for All Beneficiaries
    • Considerations When You’re Entitled to More Than One Benefit

    7. Supplemental Security Income

    • Who Is Eligible
    • Benefit Amounts
    • Reductions to Benefits

    8. Applying for Benefits

    • Retirement, Dependents, and Survivors Benefits
    • Disability Benefits
    • Supplemental Security Income (SSI)
    • Finding Out What Happens to Your Claim

    9. Appealing a Social Security Decision

    • Reconsideration of Decision
    • Administrative Hearing
    • Appeal to the National Appeals Council
    • Lawsuit in Federal Court
    • Lawyers and Other Assistance

    10. Federal Civil Service Retirement Benefits

    • Two Retirement Systems: CSRS and FERS
    • Retirement Benefits
    • Disability Benefits to Federal Workers
    • Payments to Surviving Family Members of Workers Who Die While Employed
    • Applying for CSRS or FERS Benefits

    11. Veterans Benefits

    • Types of Military Service Required
    • Compensation for Service-Connected Disability
    • Pension Benefits for Financially Needy Disabled Veterans
    • Survivors Benefits
    • Medical Treatment
    • Getting Information and Applying for Benefits

    12. Medicare

    • The Medicare Maze
    • Medicare: The Basics
    • Part A: Hospital Insurance
    • How Much Medicare Part A Pays
    • Part B: Medical Insurance
    • How Much Medicare Part B Pays
    • Part D: Prescription Drug Coverage
    • Medicare Coverage for People With End-Stage Renal Disease (ESRD)

    13. Medicare Procedures: Enrollment, Claims, and Appeals

    • Enrolling in Part A: Hospital Insurance
    • Enrolling in Part B: Medical Insurance
    • Medicare’s Payment of Your Medical Bills
    • Paying Your Share of the Bill
    • Your Medicare Summary Notice
    • Appealing the Denial of a Claim
    • Medicare Part D: Enrollment, Exceptions, and Appeals
    • Switching Part D Plans
    • State Health Insurance Assistance Programs (SHIPs)

    14. Medigap Insurance

    • Gaps in Medicare
    • Standard Medigap Benefit Plans
    • Terms and Conditions of Medigap Policies
    • Finding the Best Medicare Supplement

    15. Medicare Part C: Medicare Advantage Plans

    • Medicare Advantage Managed Care Plans
    • Medicare Advantage Fee-for-Service Plans
    • Choosing a Medicare Advantage Plan
    • Comparing Medigap and Medicare Advantage Plans
    • Your Rights When Joining, Leaving, or Losing a Medicare Advantage Plan

    16. Medicaid and State Supplements to Medicare

    • Medicaid Defined
    • Who Is Eligible
    • Medical Costs Covered by Medicaid
    • Requirements for Medicaid Coverage
    • Cost of Medicaid Coverage
    • Other State Assistance With Medical Costs
    • Applying for Medicaid, QMB, SLMB, or QI
    • What to Do If You Are Denied Coverage


  • Sample Chapter
  • Chapter 1

    Social Security: The Basics

    Social Security is the general term that describes a number of related programs—retirement, disability, dependents, and survivors benefits. These programs operate together to provide

    workers and their families with some monthly income when their normal flow of income shrinks because of the retirement, disability, or death of the person who earned that income.

    The Social Security system was originally intended to provide financial security for older Americans. Unfortunately, this goal of providing financial security is today increasingly remote. Benefits have not come close to keeping up with rapidly rising living costs, especially for seniors, which means that the support offered by Social Security is less adequate with each passing year. This shrinking of the Social Security safety net makes it that much more important that you get the maximum benefits to which you’re entitled.

    This chapter explains how Social Security programs operate in general. It’s helpful to know how the whole system works before determining whether you qualify for a particular benefit program and how much your benefits will be. Once you understand the basic premises of Social Security, you’ll be better equipped to get the fullest benefits possible from all Social Security programs for which you might qualify, which are explained in detail in Chapters 2, 3, 4, 5, and 6.

    History of Social Security

    Public images of our society generally make invisible many millions of economically hard-pressed older Americans. The older person with little income and assets is left out of the standard media pictures of two-car, two-kid suburbanites and of wealthy retired couples in gated luxury communities.

    During periods of extreme economic crisis, the number of people cast off by the economy spills over the normal lines of invisibility. One such period of extreme economic dislocation was the Great Depression of the 1930s, during which many millions of people were displaced—not only from job, home, and family, but from any hope for a place in the economy. Faced with the crisis of the Depression and with the possibility of massive social upheaval, President Franklin Roosevelt and Congress pushed through a number of programs of national financial assistance—one of which was a system of retirement benefits called “Social Security,” enacted into law in 1935. But these retirement benefits were set at levels that barely kept people above the poverty line.

    In 1939, Social Security benefits were extended to a retired worker’s spouse and minor children, and in 1956, they were extended to severely disabled workers. While these additions covered more people in need, neither new program deviated from the basic premise of Social Security: Provide just enough to keep starvation from the door, but not enough to guarantee a decent standard of living.

    Benefits Now Provide Diminished Security

    The economic position of many older Americans today is increasingly precarious. People are living longer, private pensions are disappearing, and Social Security benefits—despite cost-of-living increases in most years—aren’t keeping up with their true living expenses.

    And now the Social Security system itself is under pressure. Due to longer life spans and an overall population increase, there is a steady increase in the number of people collecting Social Security benefits. If the system continues as is, the total benefits that retirees, dependents, and survivors collect will eventually surpass the amount of taxes paid into the Social Security Trust Fund by younger workers and the interest earned on the fund. So, if the system isn’t altered, at some point—although experts disagree about exactly when—the system will no longer be able to pay the full benefits currently promised.

    “Saving” Social Security

    Clearly, the Social Security system requires adjustment to ensure its continued health. There are simple ways to fix the Social Security system, but they’re ignored by some politicians who want nothing less than to end all public pensions and other support systems and force all retirement savings into the stock market. There, people’s savings would be bled by the financial institutions and other corporate profiteers that run Wall Street—a happy prospect for the people who bankroll elected national officials, but a disaster for working Americans.

    Instead, simple adjustments to the system—none raising the basic Social Security tax rate—could address its financial problems without introducing investment risk or siphoning off funds to Wall Street.

    Remove cap on earnings subject to Social Security (FICA) tax. At present, the Social Security system doesn’t tax earned income (wages) over $168,600 per year (the amount goes up each year). This makes the FICA (Social Security) tax what’s called a regressive tax (a tax that takes a larger percentage of the income of low-income people than of high-income people). For example, someone earning $30,000 per year pays about 6.2% of their income in FICA tax while someone earning $300,000 pays only 3.3% of their total income. The Congressional Research Service has found that removing this cap on taxed income, by itself, would keep the Social Security retirement system solvent for the next 75 years. So far, however, national politicians and their high-income supporters have resisted this change.

    Reduction against early benefits for nonearned income. Under current rules, people can claim Social Security retirement or dependents benefits as early as age 62 and survivors benefits as early as age 60. But if someone collects any of these Social Security benefits and continues working, the benefits are partly reduced by income the beneficiary earns over a certain amount. The rule does not apply, however, to income from sources other than current work—such as investments, real estate, trusts, and so on. This rule penalizes those who must continue to work in order to survive, at the same time permitting others to collect their full benefit amount despite any amount—no matter how enormous—of nonearned income. If the same rule were applied to nonearned as well as earned income, the system could save significantly without taking anything away from those who most need benefits.

    Delay full retirement age. The original standard age for full Social Security retirement benefits was 65. Congress raised that age for people born in 1938 or later, saving a great deal of money for Social Security. The age at which most people stop working continues to rise, so there’s no reason why the full retirement age for collecting Social Security benefits shouldn’t also rise again to parallel this changing reality.

    Slight reduction in benefits for high-income recipients. Congress could create a yearly reduction in retirement benefits to people who continue to have a high income from work or investments after they claim retirement benefits—in other words, reduced benefits for people who don’t need them.

    Any one of the adjustments discussed above would make a significant contribution to the long-term stability of Social Security. Several of them together could put the system on sound financial footing for many decades to come.

    What You Can Do

    In response to this deteriorating situation, anyone facing retirement should take two important steps.

    First, understand the rules regarding Social Security benefits. (They’re described in Chapters 1 through 5.) That will enable you to plan wisely for your retirement years, including answering the basic questions of when to claim your benefits and how much you can work after claiming them.

    And second, become aware and active concerning proposed moves by Congress regarding the Social Security and Medicare programs. Local senior centers and national senior organizations such as the Alliance for Retired Americans in Washington, D.C. ( are good sources of current information.

    If you’re even beginning to think about your retirement, it is not too early to begin trying to safeguard it.

    Social Security Defined

    Social Security is a series of connected programs, each with its own set of rules and payment schedules. All of the programs have one thing in common: Benefits are paid—to a retired or disabled worker, or to the worker’s dependent or surviving family—based on the worker’s average wages, salary, or self-employment income from work covered by Social Security.

    The amount of benefits to which you’re entitled under any Social Security program isn’t related to your need. Instead, it’s based on the income you’ve earned through years of working. In most jobs, both you and your employer will have paid Social Security taxes on the amounts you earned. You also pay Social Security taxes on your reported self-employment income.

    Social Security keeps a record of your earnings over your working lifetime and pays benefits based upon the average amount you earned. But the only income Social Security considers is earned income, from work, on which Social Security tax was paid. Income such as interest or dividends, or income from the sale of a business or stocks or other investments, isn’t counted in calculating Social Security benefits.

    Four basic categories of Social Security benefits are paid based on this record of your earnings: retirement, disability, dependents, and survivors benefits.

    Retirement Benefits

    You can choose to begin receiving Social Security retirement benefits as early as age 62. But the amount of your benefits permanently increases for each year you wait after 62, until age 70. Benefits don’t increase past age 70, so don’t wait until after age 70 to claim benefits.

    The amount of your retirement benefits, if taken at full retirement age (currently 66+ years), will be between about 20% of your average income (if your income is high) and about 50% (if your income is low). For a 66-year-old single person first claiming retirement benefits in 2024, the average monthly benefit is about $1,900; $3,000 for a couple.

    The highest earners first claiming their benefits in 2024 (at full retirement age) would receive about $3,800 per month; $5,700 for a couple (receiving benefits on one spouse’s earnings record). These benefits usually increase yearly with the cost of living. (See Chapter 2 for a full description of retirement benefits.)

    Disability Benefits

    If you’re younger than full retirement age but have met Social Security’s work requirements and are considered disabled under the Social Security program’s medical guidelines, you can receive disability benefits.

    The amount of these benefits will be roughly equal to what your retirement benefits would be if you’d reached full retirement age before claiming benefits. (See Chapter 3 for a full discussion of disability benefits.)

    Dependents Benefits

    If you’re married to a retired or disabled worker who qualifies for Social Security retirement or disability benefits, you and your minor or disabled children might be entitled to benefits based on your spouse’s earning record. This is true whether or not you actually depend on your spouse for your support.

    A spouse can be awarded retirement or dependents benefits, but not both. When you file a claim for Social Security benefits, Social Security will determine which benefit you’ll receive, depending on which benefit is higher. (See Chapter 4 for a full discussion of dependents benefits.)

    Note for same-sex spouses. Married same-sex spouses are entitled to Social Security dependents and survivors benefits on the same terms as other spouses.

    Survivors Benefits

    If you’re the surviving spouse of a worker who qualified for Social Security retirement or disability benefits, you and your minor

    or disabled children might be entitled to benefits based on your deceased spouse’s earnings record. (See Chapter 5 for a full discussion of survivors benefits.)

    You can choose the program from which to claim benefits. You might meet the eligibility rules for more than one type of Social Security benefit. For example, you might be technically eligible for both retirement and disability, or you might be entitled to benefits based on your own retirement as well as on that of your retired spouse. You can collect whichever one of these benefits is higher, but not both.

    Eligibility for Benefits

    The specific requirements vary for qualifying to receive retirement, disability, dependents, and survivors benefits. The requirements also vary depending on the age of the person filing the claim and, if

    you’re claiming as a dependent or survivor, on the age of the worker.

    However, there’s one requirement that everyone must meet to receive one of these Social Security benefits: The worker on whose earnings record the benefit relies must have worked in “covered employment,” thereby earning official “work credits,” for a sufficient number of years by the time the worker claims retirement benefits, becomes disabled, or dies.

    Earning Work Credits

    All work on which Social Security taxes are paid is considered covered employment. About 96% of all American workers—around 180 million people—work in covered employment, including self- employment. For each year you work in covered employment, you receive up to four Social Security work credits, depending on the amount of money you’ve earned. Once you have enough work credits, you and your dependents and survivors can qualify for Social Security benefits.

    The amount of work credits you need in order to qualify for specific programs is discussed in Chapter 2 (retirement benefits), Chapter 3 (disability benefits), Chapter 4 (dependents benefits), and Chapter 5 (survivors benefits).

    The Importance of Names and Numbers

    The Social Security system does everything—records your earnings, credits your taxes, determines and pays your benefits—according to your Social Security number. On every form you fill out or correspondence you have with the Social Security Administration, you must include your Social Security number. You should also use your name exactly as it appears on your Social Security card. This will make it easier for Social Security to track the correct records.

    If you’ve used more than one name on work documents, indicate all names you have used on correspondence with the Social Security Administration. As long as you have used the same Social Security number, your records should reflect all of your earnings.

    If you’ve changed your name and want to ensure that all your future earnings will be properly credited to your Social Security record, you can protect yourself by filling out an Application for Social Security Card. This form allows you to register your new name and match it with your existing Social Security number. You’ll be sent a new Social Security card with your new name, but the same number.

    To complete this form, you must bring to your local Social Security office the originals or certified copies of documents that reflect both your old and new names. If your name has changed because you married or remarried, bring your marriage certificate.

    If your name change is due to divorce, bring the final order of divorce, which includes a reference to the return of your former name.

    If you have any questions, particularly concerning the type of documents you can bring to show your old and new names, call Social Security at 800-772-1213.

    The Social Security Administration (SSA) keeps track of your work record through the Social Security taxes paid by your employer through payroll taxes and by you through FICA taxes.

    The self-employed—that is, people who receive pay from others without taxes being withheld (such as freelancers and consultants) or who take a draw from a self-owned or partnership business—earn Social Security credits by reporting income and paying tax for the net profit from that income on IRS Schedule SE. Income that isn’t reported won’t be recorded on your earnings record. Although many people fail to report self-employment income to avoid paying taxes, a long-term consequence is that the unreported income won’t count toward qualifying for Social Security retirement or other benefits, and will reduce the amount of benefits for those who do qualify.

    Coverage for Specific Workers

    There are special Social Security rules for coverage of some workers in certain sorts of employment.

    Federal Government Workers
    If you were hired as an employee of the federal government on or after January 1, 1984, all your work for the government since then has been covered by Social Security.

    If you worked for the federal government before 1984, your work both before and after January 1, 1984 has been covered by the separate federal Civil Service Retirement System. (See Chapter 10 for a full description of civil service retirement benefits.)

    State and Local Government Workers
    Many state and local government workers aren’t covered by Social Security. State government employees are often covered by their own pension or retirement systems, and local government employees have their own public agency retirement system, or PARS.

    However, some state and local government employees are covered by Social Security instead of—or in addition to—a state or PARS pension system. If so, these governments and their workers pay at least some Social Security taxes. And workers under these plans are entitled to Social Security benefits if they meet the other regular requirements.

    If you’re a government employee and aren’t sure whether you’re covered by Social Security, check with the personnel office at your workplace. And remember, even if your employment at a state or local agency doesn’t entitle you to Social Security benefits, any other work you have done during your lifetime can qualify you, if you paid Social Security taxes.

    Workers for Nonprofit Organizations
    Since 1984, all employment for charitable, educational, or other nonprofit organizations is covered by Social Security. (Some churches and religious organizations, however, are exempt from this rule.)

    Members of the Military
    Whether your military service was considered by Social Security to be “covered employment” depends on when you served and whether you were on active or inactive duty. From 1957 on, all service personnel on active duty have paid Social Security taxes, and so all active service from that date is covered employment. Since 1988, periods of active service, such as reserve training, that happened while on inactive duty have also been covered.

    Household Workers
    Household work—cleaning, cooking, gardening, child care, minor home repair work—should be covered by Social Security, like any other paid work. However, many employers don’t report their household employees’ earnings to the Internal Revenue Service (IRS) and don’t pay Social Security taxes on those earnings. Of course, a lot of domestic workers don’t want their earnings reported. They are paid so little that they prefer to receive the full amount, often in cash, without any taxes withheld.

    A result of this nonreporting is that unreported earnings don’t get credited to the worker’s Social Security record. So when the worker or worker’s family later seeks Social Security benefits, they might have trouble qualifying and, if qualified, will have lower benefit amounts than if the earnings had been reported.

    If you want your earnings from household work reported to Social Security, you have several options. If you work for different employers and make less than $1,000 per year from any one of them, you can report that income yourself as self-employment income and pay 15.3% self-employment tax on it in addition to income tax. Paying self-employment tax on federal income tax Form 1040, Schedule SE, credits the earnings to your Social Security earnings record.

    If you work for any one employer who pays you a total of $2,400 or more over the course of a year, you can ask that employer to withhold Social Security taxes from your pay, report your income to Social Security, and pay the employer’s share of the Social Security tax on that income. The law requires the employer to do so. (See “Employer’s Duty to Report Earnings of Household Workers,” below.)

    If you do farm or ranch work, your employer must report your earnings and pay Social Security taxes on them. The employer must also withhold your share of Social Security taxes from your paycheck if you earn $150 or more from that employer in one year, or if the employer pays $2,500 or more to all farm laborers, regardless of how much you earn individually. Any amounts you’re paid in the form of housing or food don’t have to be reported by the employer.

    Farmworkers have long faced problems with employers who don’t pay their share of the Social Security tax. To make sure your farmwork is counted toward your Social Security record, check your pay stub to see if Social Security taxes—labeled FICA—are being withheld. Also, ask the person who handles payroll to give you paperwork indicating that Social Security taxes are being paid on your earnings. If your employer isn’t paying Social Security taxes on your earnings, or you get the runaround and you’re unsure what the employer is doing, ask your local Social Security office to find out for you.

    If you’re worried about your employer finding out that you’re checking on this, ask the Social Security field representative to make a confidential inquiry. Social Security can request all of the employer’s wage records without letting the employer know which employee in particular has brought the matter to its attention.

    Employer’s Duty to Report Earnings of Household Workers

    If an employer hires a household worker—cleaner, cook, gardener, child sitter, home care aide—who isn’t employed by and paid through an agency, and the employer pays that worker a total of $2,400 or more during the year, the employer is required by law to report those payments and pay Social Security taxes on them. This rule exempts any worker who was younger than 18 during any part of the year.

    Employers can report these taxes on their own Form 1040 federal income tax returns and pay the Social Security tax obligation along with their personal income taxes. To file and pay these taxes, the employer will need the names of the employees as they appear on their Social Security cards, the employees’ Social Security numbers, and the amount of wages paid.

    Earning Work Credits

    To receive any kind of Social Security benefit—retirement, disability, dependents, or survivors—the person on whose work record the benefit is based must have accumulated enough work credits. The number of work credits you need to reach the qualifying mark— what Social Security calls “insured status”—varies depending on the particular benefit you’re claiming and the age at which you claim it.

    You can earn up to four work credits each year, but no more than four, regardless of how much you earn. Before 1978, work credits were measured in quarter-year periods: January through March, April through June, July through September, and October through December. You had to earn a specific minimum amount of income to gain a work credit for that quarter, as follows:

    • Before 1978, you received one credit for each quarter in which you were paid $50 or more in wages in covered employment, or each quarter in which you earned and reported $100 or more from self-employment.
    • Beginning in 1978, the rules were changed to make it easier to earn credits. From 1978 on, you receive one credit, up to four credits per year, if you earn at least a certain amount of money in covered employment, regardless of the quarter in which you earn it. That means that if you earn all your money during one part of the year and nothing during other parts of the year, you can still accumulate the full four credits. The amount needed to earn one credit increases yearly. In 1978, when the new system was started, it was $250; in 2024, it’s $1,730.

    Example 1: In 1975, Ulis was paid $580 between January and March, nothing between April and July when he could not work because of a back injury, $340 in August, and $600 in cash from self-employment in October and November. For the year 1975, Ulis earned three credits: one credit for the first quarter, in which he was paid more than the $50 minimum; nothing in the second quarter, so he got no credit; one credit in the third quarter, because he earned well over the $50 minimum even though he worked only one month; and one credit for the last quarter, because in 1975 self-employment income was covered by Social Security.

    Example 2: Eve was paid $800 in January 1978 but did not earn anything the rest of the year. Based on the earnings test in effect in 1978, she got three credits for the year—one for each $250 in earnings—based on her earnings for January alone.

    Example 3: Rebecca was paid $600 a month in 2024 at her part-time job, for total earnings for the year of $7,200. Because her earnings of $7,200 divided by $1,730 (the amount needed to earn one credit in 2024) is more than four, she received the maximum four credits for 2024.

    Determining Your Benefit Amount

    If you (or your dependents or survivors) are eligible for a Social Security benefit, the amount of that benefit is determined by a formula based on an average of your yearly reported earnings in covered employment since you began working. Social Security adjusts your earnings records every year that you have Social Security-taxed earnings (even after you begin collecting benefits, if you keep working).

    How Your Earnings Average Is Computed

    Social Security computes the average of your yearly earnings, but places a yearly limit on the amount you can be credited with, no matter how much you actually earned that year. These yearly income credit limits are shown in the following table, “Yearly Dollar Limit on Earnings Credits.”

    Only employment-related income counts, and you must have paid Social Security taxes on that income. Other income that you might have earned, such as interest, dividends, capital gains, rents, and royalties, won’t be considered in calculating your Social Security benefits.

    Benefit Formula

    Based on a worker’s earnings record, the Social Security Administration computes what’s called the worker’s “Primary Insurance Amount,” or PIA. This is the amount a worker will receive in retirement benefits at full retirement age, which is 66 for everyone born in 1943 through 1954. The full retirement age is 67 for those born in 1960 or later. The exact formula applied to each worker’s earnings record depends on the year the worker was born.

    Yearly Dollar Limit on Earnings Credits
    1951–1954 $3,600 1995 $61,200
    1955–1958 4,200 1996 62,700
    1959–1965 4,800 1997 65,400
    1966–1967 6,600 1998 68,400
    1968–1971 7,800 1999 72,600
    1972 9,000 2000 76,200
    1973 10,800 2001 80,400
    1974 13,200 2002 84,900
    1975 14,100 2003 87,000
    1976 15,300 2004 87,900
    1977 16,500 2005 90,000
    1978 17,700 2006 94,200
    1979 22,900 2007 97,500
    1980 25,900 2008 102,000
    1981 29,700 2009–2011 106,800
    1982 32,400 2012 110,100
    1983 35,700 2013 113,700
    1984 37,800 2014 117,000
    1985 39,600 2015 118,500
    1986 42,000 2016 118,500
    1987 43,000 2017 127,200
    1988 45,000 2018 128,400
    1989 48,000 2019 132,900
    1990 50,400 2020 137,700
    1991 53,400 2021 142,800
    1992 55,500 2022 147,000
    1993 57,600 2023 160,200
    1994 60,600 2024 168,600

    There is no “minimum” Social Security benefit amount. If your average earnings were quite low, your check will also be low.

    Social Security benefits for a disabled worker (as described in Chapter 3), or for a worker’s dependents (as described in Chapter 4) or survivors (as described in Chapter 5), are based on a percentage of the worker’s PIA. Social Security can give you an estimate of your future retirement or disability benefits, or those of a worker on whose earnings record you’ll receive dependents or survivors benefits.

    Veterans Can Receive Extra Earnings Credit

    If you’re a veteran of the U.S. Armed Forces, you might be eligible for extra earnings credit, including:

    • an extra $300 per quarter for active duty from 1957 through 1977, and
    • $100 of credit for each $300 of active duty basic pay, up to a maximum credit of $1,200 per year for active duty from 1978 through 2001. No extra credit is given if you enlisted after September 7, 1980 and didn’t complete at least 24 months’ active duty or your full tour.

    Notice that no extra credit is given for active duty after 2001.

    Don’t be alarmed if you don’t see your extra credits reflected on your Social Security statement. They will be added to your record when you actually apply for benefits, at which time you’ll have to provide proof of your military service. Active duty earnings from 1968 on should be included in the benefit estimates on your statement, although the extra credit amounts won’t show up in the statement’s year-to-year list of your earnings.

    Taxes on Your Benefits

    A certain amount of Social Security benefits might be taxable, depending on your total income. In determining whether you owe any income tax on your benefits, the Internal Revenue Service looks at what it calls your “combined income.” This consists of your adjusted gross income, as reported in your tax return, plus any nontaxable interest income, plus one-half of your Social Security benefits. If your combined income as an individual is between $25,000 and $34,000 (or, for a couple filing jointly, between $32,000 and $44,000), you might have to pay income taxes on 50% of your Social Security benefits. If your combined income is more than $34,000 ($44,000 for a couple filing jointly), you might owe income taxes on up to 85% of your benefits. That 50% or 85% of your benefits will be taxed at your personal income tax rate.

    Unpaid Student Debt Can Reduce Benefits

    More and more people still have student loan debt when they become eligible to collect Social Security benefits. You should be aware that if you’ve defaulted on federally guaranteed student debt when you begin receiving retirement, disability, dependents, or survivors benefits, the Social Security Administration can reduce the amount of your benefit until the debt is paid off. The size of the benefit reduction depends on the amount of your remaining debt and the amount you’re supposed to be paying off monthly. The maximum the government can take is 15% of benefits, and no one’s benefits can be reduced to less than $750 per month.

    Note: If you’re collecting Social Security disability benefits and your disability might be considered “total and permanent” by special Social Security rules, your entire remaining student debt might be discharged (wiped off the books). For a discussion of this discharge of debt, see Chapter 3.

    The way to calculate any income taxes you might owe on your Social Security benefits is explained in the instruction booklet that accompanies the Form 1040 federal tax return. The IRS also publishes a free information booklet explaining numerous tax rules pertaining to older people. It’s called Tax Guide for Seniors, Publication 554. To get the booklet, call the IRS at 800-829-3676 or download it from the website

    Taxes paid on Social Security benefits go back into the Social Security Trust Fund, not the general fund.

    Your Social Security Earnings Record

    The Social Security Administration keeps a running account of your earnings record and the work credits it reflects. (It tracks these by using your Social Security number.) Based on those figures, Social Security can give you an estimate of what your retirement benefits would be if you took them at age 62, full retirement age, or age 70. It can also estimate benefits for your dependents or survivors, or your disability benefits, should you need them.

    It makes good sense to find out what your Social Security retirement benefits will be several years before you actually consider claiming them. And you want to make sure that all your covered earnings are credited to you.

    To check your earnings record and estimate of benefits, go to the Social Security Administration’s website at

    A Social Security statement is supposed to be mailed yearly to everyone age 60 and older who isn’t currently receiving Social Security benefits and who hasn’t signed up to receive a benefit statement online through the Social Security Administration website. If you haven’t received a Social Security Statement, or if you have a question about your earnings record, call Social Security at 800-772-1213.

    U.S. Citizens’ Rights to Receive Benefits While Living Abroad

    If you’re a U.S. citizen living in another country, you’re usually entitled to the same Social Security benefits—to the extent you earned them through work in the United States—as if you lived in the United States. However, your retirement benefits might be reduced if you also receive a pension in the other country. (See “Reductions for Government or Foreign Pensions” in Chapter 2.)

    If you’re married to someone who isn’t a U.S. citizen, and you both live outside the United States, your spouse isn’t entitled to Social Security dependents or survivors benefits based on your work record. (Your spouse might still be entitled to Social Security retirement benefits based on their own work performed while living in the United States; see the following section, “Receiving Benefits as a Noncitizen.”)

    If you live in one of a few particular countries, there are restrictions on the sending of your Social Security benefits. If you live in Cuba or North Korea, a law passed during the Cold War forbids the Social Security system from sending your benefits there. Instead, you would have to have the benefits sent to a bank in the United States or in some third country, and then transfer the money on your own. If you live in Vietnam or Cambodia, or in one of the Central Asian former Soviet republics, you might be able to receive Social Security payments there, but only if you make special arrangements with Social Security and the U.S. embassy in that country.

    Receiving Benefits as a Noncitizen

    It’s increasingly common for people who aren’t U.S. citizens to live and work here for long periods of time. This section explains your rights to collect Social Security benefits if you’re not a U.S. citizen, whether you’re living in the United States now or have since left to live in another country.

    Noncitizens Living in the United States

    Noncitizens living in the United States are entitled to all the Social Security benefits that they or their spouse or parents have earned— under the same rules as U.S. citizens—if they’re lawfully in the United States. For example, you might be able to collect benefits if you:

    • were not a U.S. citizen during some or all of the time you or your family member worked in the United States, but have since become a U.S. citizen, or
    • are not a U.S. citizen, but are a lawful permanent U.S. resident or have another immigration status permitting you to be lawfully present in the United States.

    Non-U.S. Citizens Living Abroad

    Many non-U.S. citizens live and work for a time in the United States, paying Social Security taxes and earning enough work credits to qualify for benefits for themselves and their families. However, many of these people ultimately leave the United States. Their ability to collect earned Social Security benefits after departing depends in large part on whether the United States has entered into agreements with their home countries. If you’ve formerly worked in the U.S., you need to look at three things to figure out your eligibility for benefits, including:

    • your country of citizenship
    • the country where you’re living when you request Social Security benefits, and
    • the type of benefit you’re requesting.

    To find out what your rights are to collect Social Security benefits based on your country of citizenship, your country of residence, and the type of Social Security benefit you’re entitled to receive, see the Social Security Administration’s publication Your Payments While You Are Outside the United States, available at

    We hope you enjoyed this sample chapter. The complete book is available for sale here at


7 Reviews
5 Star
4 Star
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1 Star

Too political.

By Joe E.

The author would do better to leave politics out and put more facts in. Had I known this title pushed an agenda, I would have looked elsewhere.

Posted on 2/7/2024

The Best little book in Retirement !

By Laura V.

this has helped so much ! i'm no longer hunting and pecking to find information for my soon to be retirees on line. I wish i knew more about this subject within HR but its for AFTER CARE from your work life. Thank you for providing much needed information that we will all need one day. Suggestion...maybe a mention of the additional types available like here in Texas there is a PART J ect...

Posted on 2/7/2024

Explore the System

By Sue H.

Lots of information to ingest for me but am reading it with new found thing daily. Am glad I purchased this book to find out such things I needed to know. I suggest to many others to purchase this to find out what out about the system.

Posted on 2/7/2024


By Kenneth F.

Great overview! We would welcome more content about where benefits overlap, cross-discussion between different benefits schemes and "tradeoff" situations, like whether to file for WC disability versus retirement.

Posted on 2/7/2024

Wonderfully informative

By Deborah P.

This is a book that I initially brought home from the library. It contains so much usefull information that I purchased a copy for myself. It is a valuable reference tool every senior needs.

Posted on 2/7/2024

Good for All

By Zaw L.

Got legal and procedure knowledge from this book.

Posted on 2/7/2024

Excellent coverage

By Anonymous

Excellent detailed coverage of social security rules; well organized to find answers to questions you may have.

Posted on 2/7/2024

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