Social Security

Social Security

Social Security is a group of government programs administered by the Social Security Administration (SSA) which makes payments to individuals. The programs provide economic assistance to people faced with unemployment, disability, or old age. It is financed by contributions from employers and employees. Eligibility for most SSA programs is based upon the work history of the recipient or a family member. They may be placed in the following general categories: retirement benefits; disability benefits; spousal benefits; dependent benefits; and lump sum death benefits.

Generally, to be eligible, a retiring individual must have worked for ten years during the worker's lifetime in employment covered by Social Security. To reach 10 years of coverage, one must work 40 quarters (three-month periods). Since 1970, quarters of work have been based upon annual earnings, not the actual number of months worked. Therefore, a worker earning $2,800 in 1998 would receive 4 quarters of credit, even if all of the money was earned within one calendar month. No more than 4 quarters may be earned in any calendar year. Eligible individuals may take "early retirement" at a reduced monthly benefit level starting at age 62. Retiring at an age of 65 (the "expected" age of retirement), one will receive a normal benefit. Taking a "late retirement" after age 65 will

give one a higher than normal monthly benefit. Due to increasing average life spans the "normal" or "expected" retirement age will be increased in the future. For persons born between 1943 and 1959, the "expected" retirement age is gradually increased to age 66 and for persons born after 1959 it is increased to 67.

If one is disabled and has worked a sufficient number of quarters during their work history, one may be eligible for Social Security disability benefits. One is considered disabled if one has physical or mental impairments which prevent one from engaging in substantial gainful activity. One’s disability must be expected to last for a minimum of 12 months or expected to result in death. If one becomes disabled before age 24, one must have worked at least six quarters in the three