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Originally Posted by Aleta
MonkeyMam: Yes, we do get the statements and it shows the benefits. It sounded like full benefits meant maybe more money. I understood that you needed 10 years or 40 quarters to be able to claim social security and I know that they look at your best 20 or 30 years to determine your benefit.
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I am unsure of what a credit really means, other than you are entitled to the full benefits you've worked to earn.
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link to "credits" explanation
Answer
quote from article
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Question
I worked for the last 10 years and I now have my 40 credits. Does this mean that I get the maximum Social Security retirement benefit?
Answer
Probably not. The 40 credits are the minimum number you need to qualify for a benefit. The amount of the benefit, however, is not based on those credits; it's based on your earnings. We determine your average earnings over your working years and use a special calculation formula that is set by law. For most people like you who need 40 credits, we must average their best 35 years of earnings to figure the benefit amount
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The actual answer is you don't get a minimum benefit until you get 40 credits.
some good reading...
Social Security Statement: How Your Benefit Is Figured
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Here's how we figure your Social Security benefit at full retirement age if you turn 62 in 2007:
Step 1- We determine the number of years of earnings to use as a base. If you were born after 1928, that base number is your 35 highest years of earnings. Fewer years are used for people born in 1928 or earlier.
Step 2- We adjust the earnings in these years for wage inflation. We call this "indexing."
Step 3- We determine your average adjusted monthly earnings based on the number of years in step 1. (If you don't have earnings in 35 different years, some years with $0 earnings will be used to figure this average amount.)
Step 4- We multiply your average adjusted monthly earnings by percentages in a formula that is set out by law. If you turn 62 in 2007, that formula adds together:
90 percent of your first $680 of average monthly earnings,
32 percent of the amount between $680 and $4,100, and
15 percent of everything over $4,100 to give you your full retirement benefit amount. (If you start your benefits before you reach full retirement age, this amount will be reduced.)
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So the best benefit is for those which worked 35 years (to minimize "0" benefit years).
Once I wrap myself around this, I smell a blog entry. LOL