Basically, Social Security credits are accounting units that you earn when you work and pay Social Security taxes.
Sometimes called quarters of coverage, credits are a key part of how Social Security functions. You must collect a certain number to qualify for retirement benefits, survivor benefits for family members after your death or Social Security Disability Insurance (SSDI) if you become unable to work.
In 2023, you get one credit for every $1,640 you earn in wages or self-employment income. By earning $6,560, you get four credits, which is the most you can obtain in one year. The amounts are adjusted annually based on national wage trends.
No one needs more than 40 credits to qualify for any Social Security benefit, but the eligibility threshold varies among them.
- Retirement benefits: No wiggle room here. You need 40 credits (for most people, a decade in the workforce) to qualify.
- Survivor benefits: The younger a worker is at the time of death, the fewer credits that person must have earned for surviving family members (typically a spouse and/or minor children) to receive benefits. In some cases, Social Security can pay benefits to the family of a worker who has accrued as few as six credits in the three years before dying.
- Disability benefits: Qualification depends on a person's age when the disability occurs. People who are younger than 24 when they become disabled may qualify for SSDI with as few as six credits earned in the prior three years. From age 31 on, you generally will need at least 20 credits from the 10 years before the disability occurred.
The rules are laid out in greater detail in the Social Security publication "How You Earn Credits."
Keep in mind
- Earning more than 40 credits during your working life does not affect your benefit amount. Credits are used only for qualification purposes.
- You need not accrue 40 credits consecutively to qualify for retirement benefits. If you stop working, the credits you have stay on your record, and you resume earning them if you return to work.
- No credits are required to receive spousal benefits. You may be able to collect benefits on the earnings record of a husband or wife even if you have never worked.