1. What determines whether I am covered by Social Security? Your coverage (or insured status) is determined generally by the periods of time during which you paid Social Security taxes. These periods of time are “quarters of coverage.” (Photo: Shutterstock)
2. How do I receive a “quarter of coverage?”
In 2019, you receive one quarter of coverage for each $1,360 of earnings (wages or self-employment income), up to a maximum of four quarters. The measure of earnings needed for a quarter of coverage has increased each year since 1978.
For years prior to 1978, you received one quarter of coverage for each quarter in which earnings were $50 or more in covered employment. If self-employed, you received 4 quarters of coverage in any year in which net earnings from self-employment totaled at least $400.
Your quarters of coverage determine whether you are “currently insured” or “fully insured,” which in turn determines what benefits you or your family will receive. (Photo: Shutterstock)
3. How many quarters of coverage do I need to be “fully insured” or “currently insured?” You may be fully insured under either of two tests: (1) if you have at least 40 quarters of coverage since 1936, or (2) if you have at least 1 quarter of coverage for each year elapsing after 1950 (or after the year in which you turned 21, if later) and before the year of your disability, death, or 62nd birthday (but you must have at least 6 quarters of coverage). To be “currently insured” you must have at least 6 quarters of coverage during the 13 calendar quarters ending with the quarter in which you die, or become entitled to retirement or disability benefits. (Photo: Shutterstock)
4. What benefits are available to my dependents should I die?
If you are currently insured, three types of benefits are payable: (1) a lump sum death payment of $255 if you are survived by a spouse eligible for benefits or a child entitled to benefits based on your earnings record, (2) monthly payments to your surviving spouse during the time your children are under 16 years of age, and (3) monthly payments to your children during the time they are under 18 years of age (or under 19 if a full-time high school or elementary school student). (Photo: Shutterstock)
5. Can I lose Social Security benefits by working? Yes, if you are under the Full Retirement Age (FRA). If you are under the FRA for all of 2019, benefits are lost if you earn over $17,640 for the year. If you reach the FRA in 2019, you can earn up to $46,920 without losing benefits, but earnings are counted only in the months before reaching FRA. For example, if you reach the FRA on July 15, 2019, only the earnings you earned from January 2019 through the end of June 2019 count towards the $46,930 limit. (Photo: Shutterstock)
6. If I am receiving retirement benefits, will my spouse also receive benefits? Your spouse may begin receiving monthly benefits at age 62 or older. The spouse of a retired worker is also entitled to a monthly benefit if the spouse has a child under 16 in care. A spouse’s benefit may be reduced if the spouse receives a government pension from a job that was not covered by Social Security. Children under age 18 (or under age 19 if a full-time high school or elementary school student) will also receive monthly benefits. (Photo: Shutterstock)
7. When does a beneficiary receive an automatic cost-of-living benefit increase? Cost-of-living benefit increases are effective in December of each year and are reflected in Social Security checks mailed out the following month. Recent increases have been 3.3% in 2007, 2.3% in 2008, 5.8% in 2009, 0.0% in 2010 and 2011, 3.6% in 2012, 1.7% in 2013, 1.5% in 2014, 1.7% in 2015, 0.0% in 2016, 0.3% in 2017, 2.0% in 2018, and 2.8% in 2019. (Photo: Shutterstock)
8. What is the delayed retirement credit? You can increase your retirement benefit by delaying retirement past the FRA up to age 70. The delayed retirement credit gradually increased from 3% to 8% a year between 1990 and 2008. If you reach age 66 in 2019 and decide to delay receiving benefits, you will receive an increase in retirement benefits equal to 8% for each year you delay receiving benefits between the FRA and age 70. (Photo: Shutterstock)
9. What are the Social Security tax rates for 2019?
The Old-Age, Survivors, and Disability Insurance (OASDI) tax rate is 6.2% each for an employee and employer. The tax is imposed on up to $132,900 of wages, for a maximum tax of $8,239.80 each for an employee and an employer. The self-employment tax rate for OASDI is 12.4%. This tax is also imposed on up to $132,900 of self-employment income, for a maximum tax of $16,479.60.
The Medicare Hospital Insurance (HI) tax rate is 1.45% each for the employee and employer, and 2.9% for the self-employed. There is no limit on the amount of earnings subject to the HI tax. There may be an additional 0.9% Medicare tax on higher income earners and an additional 3.8% on unearned income, also on high earners. (Photo: Shutterstock)
10. What age must I be and what other requirements must I meet to be eligible for disability benefits?
You may be any age under the FRA. If you become disabled after age 30, you must be fully insured and must have worked in covered employment or covered self-employment for 5 out of the last 10 years. If disabled before age 31, you must have quarters of coverage in at least 1/2 the quarters between age 21 and disability (but not less than 6). Disability must be such that it can be expected to result in death or last at least 12 months.
Your disability benefit equals your PIA at the time you are disabled. Family members receive benefits under the same rules that would apply if you retired. The maximum family benefit for disability benefits is generally lower than for retirement and survivor benefits. (Photo: Shutterstock)
The actual take-home value of your Social Security benefits can vary greatly depending your age, work history and tax situation. Here are answers to some of the most common Social Security questions.
For additional information on Social Security benefits, see 2019 Social Security & Medicare Facts.
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Michael D. Thomas is an author and consultant and previously served as the Manager of Online Product Development and as a Senior Editor with the National Underwriter Company, a division of ALM Media. In addition, Mike serves as a consultant to the State of Ohio, Department of Medicaid and as a writer for “The Digital Broker Podcast,” which focuses on insurance technology and operations. Mike authors the following National Underwriter titles: 2019 Social Security & Medicare Facts, 2019 Social Security Planner, 2019 Medicare Planner, and 2019 Healthcare Reform Facts. Mike has also authored numerous articles on healthcare reform, Social Security, Medicare, and Insurance issues.