Social Security Q&A: Fiscal-planning tools offered for retirement

Published: June 1, 2008

Q: Someone told me that Social Security has tools to help with financial planning. Does it?

A: Yes. Social Security understands the need for all workers to do a better job of planning for their retirement. To help workers do this, Social Security created some very useful financial planning tools.

About two to three months before your birthday, we will send you a Social Security Statement, as long as you are a worker age 25 or older and not already receiving benefits. The statement lists your earnings and the amounts of Social Security taxes you have paid over the years. It also gives estimates of the Social Security benefits you (and dependent family members) may be eligible to receive now and in the future. The statement is intended to help workers plan for their financial future.

Another useful tool is Social Security's online retirement planner. It will let you compute estimates of your future Social Security retirement benefits. You can access our retirement planner at www.socialsecurity.gov/retire2.

Q: How long does a person need to work to become eligible for retirement benefits?

A: Everyone born in 1929 or later needs 40 Social Security "credits” to be eligible for retirement benefits. You can earn up to four credits per year. So, you need at least 10 years to become eligible. During your working years, earnings covered by Social Security are posted to your record.

You earn credits based on those earnings. Each year the amount of earnings needed for a credit rises as average earnings levels rise.

In 2008, you receive one credit for each $1,050 of earnings, up to the maximum of four credits per year.

You should remember, however, that the amount of your personal Social Security benefit is determined by the level of your earnings over a 35-year period.

For more information, visit our Web site at www.social

security.gov or call us toll-free at (800) 772-1213 (TTY 1-800-325-0778).

This column was prepared by the Social Security Administration. For fast answers to specific Social Security questions, contact Social Security toll-free at (800) 772-1213.

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