Working two extra months gets my wife social security

Published October 14, 2015   Posted in How to Retire

Here is a fun little problem that I never thought that we’d face just a couple years ago – our planned retirement date is so close, and my wife and I are so young, that it appears that my wife will be ineligible for Social Security, which she has judiciously funded for her entire working career, if she retires along with me in December of 2016.

Talk about a kick in the pants.

My wife will be just 31 at that point and, according to the Social Security Administration, she would not have earned enough “credits” to receive benefits at retirement age.  You see, Social Security in the United States requires that workers earn a certain number of credits to be eligible for their own benefits.  Each credit is awarded after a certain earned income level has been achieved for that year (which is based off of the average wage).  The sticking point is the total number of credits that can be earned in a year is only 4.

This sticking point is responsible for our problem.

I admit to not knowing the ins and outs of Social Security credits before we stumbled upon it several weeks ago.  Check out the Social Security benefits planner page for a more detailed look at how credits influence your benefits come “official” retirement.

The number that we are most concerned about is the number of credits needed for retirement benefits. According to the Social Security web site, each person needs 40 credits to be eligible for retirement benefits if born after 1929.  Credits are earned based on wage averages for that year.

The amount of earnings it takes to earn a credit has changed since 1978. In the year 2015, you must earn $1,220 in covered earnings to get one Social Security or Medicare work credit and $4,880 to get the maximum four credits for the year.

It turns out that my wife will be three credits short of 40. Three freaking credits!

Now, while it is true that any additional income that my wife earns during our post-retirement thrill ride will count towards her total credits, we have meticulously planned our retirement without depending on a single dime of additional income, and we’d like to keep it that way.

But, we also want to get back all the money that was taken from my wife’s paycheck over her working career.

What’s a couple of future early retirees to do?

In our case, it’s easy – my wife continues to work passed our retirement date, but only a couple months.  February of 2017 will be HER retirement month, which also coincides with her birthday – a pleasant extra perk of this new plan.  I’ll most likely still retire December of 2016 and start work on our post-retirement home.

If you’re a future early retiree, are you sure that you’ll have enough credits to see your earned benefits decades down the line?

How to determine your earned Social Security credits

My Social SecurityYou may be wondering how many credits YOU have earned and whether or not you are currently eligible for Social Security benefits – or will be by the time that you plan to retire.  If you are 60 years of age or younger, you can signup for a Social Security account online to view your official statement of earnings as well as your credit status.

If you already have an account, simply login and click on the ‘Estimated Benefits’ link towards the top of the page.  If you haven’t created your account, visit the web page to create an account by clicking on “my Social Security” (pictured to the right as of October, 2015).

The account signup process will ask for some general information about you, including your name, address, date of birth and social security number.  It will then ask you a few verification questions – historical in nature – that supposedly only you know.  These might be questions about where you lived in the past, who your mortgage lender is or any car loans you may have (or have had in the past).

If all goes to plan with the verification step, you will then create a username and password for your account.  Finally, you’ll be able to login.

Note: I had problems with the verification questions.  I had mis-answered one of them, which required a 24-hour waiting period before I could try again.  Eventually my “account” got locked out (linked to my social security number), so I had to visit a local Social Security office to have my account created. Visiting your local Social Security office is an alternative to creating your my Social Security account online.

Once your account is created and active, simply login to view your overview page.  The overview page provides a quick look into your current benefit & payment status for any benefits that you might already be receiving, as well as an estimate of future benefits if you are not currently at retirement age.

To view your credit status, click the ‘Estimated Benefits’ link at the top of the page. The ‘Estimated Benefits’ page will give you the thumbs up or thumbs down about your credit status for Retirement, Disability and Survivors and Medicare benefits.

If you have earned enough credits, you’ll see a message like this:

You have earned enough credits to qualify for retirement benefits. At your current earnings rate, your estimated payment would be:

Underneath, your estimated benefits at the age of retirement will be displayed using your income from the previous year.  Please note that these numbers assume that you continue working until retirement age.  A reduction in earned income after early retirement will significantly effect your actual retirement numbers.

And hooray!  I have earned enough credits to receive Retirement, Disability, Survivor and Medicare benefits!  That means I can retire today and still receive Social Security benefits in 30 years.  Sounds like a plan to me!

But then again, I’m 34 years old and my wife is only 30, so I have 4 years on the woman.  Sadly, she does not yet have the credits needed for benefits, and an additional couple months of working will be well worth guaranteed benefits at “retirement age” – according to the Social Security Administration.

As a side note: It is also kinda fun to take a look through your earnings record (by clicking the ‘Earnings Record’ link at the top of the page) for a historical look at how much money you earned throughout your lifetime based on your tax returns.  In 1999 I made a whopping $9k working at a camera shop in my home town.  It’s fun to watch the numbers increase over time.

Do you have a Social Security account online?  Have you looked at your credit status lately?

We track our net worth using Personal Capital


28 responses to “Working two extra months gets my wife social security”

  1. Cash Crone says:

    Great article! I signed up online after reading it, and it was great to know where I stand with Social Security benefits (and I am much closer to benefits age than you are!). Thank you for sharing the information.

    • Steve says:

      You are welcome, and I appreciate the kind words. It’s always nice to have that extra level of satisfaction that all that money you’ve been forced to contribute to social security over the years is accounted for – at least on paper. 🙂

  2. Maggie says:

    Neither of us will be eligible, which is why part of our “early retirement” plans include doing something that makes just enough for us to get our credits each year. My father in law is a CPA and he says he has several clients that retire and don’t get social security because they work in an industry that doesn’t pay into social security (local governments, train companies, etc.), so they become greeters at Walmart just to get social security. That sounds like a horrible option. We plan to do something more fun! 🙂

    • Steve says:

      Hi Maggie – I wish my industry didn’t pay into Social Security…I’d have so much more net worth at the moment had I been able to devote those funds into my retirement account. But alas, I had no choice in the matter. 🙂

      I have no doubt that your plan will be much, much more fun!

  3. This is really interesting. While I won’t rely on receiving Social Security benefits in the future, it’s important to make sure that we qualify before retiring. Thanks for this information!

  4. Jason says:

    Sounds like a plan. I unfortunately don’t get much for social security. Most of my working life I have been a government employee and live in a state where we are exempt from social security. Therefore, I have only one of the three legged retirement stool to stand on. It is great that you will have at least two of the legs.

    • Steve says:

      That’s the thing – I wish that I was exempt from Social Security! I’d have significantly more net worth at the moment if I was, and I could use it how I see fit early on in life without waiting until 65. I definitely wish we could trade places in that regard. 🙂

  5. Thanks for breaking this down! At least you guys figured this out now, and not after you both quit your jobs! We created accounts and are all set with our credits. Of course, they factor benefits based on your top 35 earning years, sooooo… There will be a lot of zeroes factored into that average! But some benefits are better than none. 🙂

    • Steve says:

      Yup, I agree ONL – social security is a shoddy deal to begin with, but as long as we get back at least what we paid into it, I’ll be happy. Yes, when it comes to getting benefits from the government, my expectations are quite low. 🙂

  6. It is a good thing you discovered this now and not years later. We found something similar with my wife’s pension plan. If she works until November 2016 she is fully vested, can draw immediately if she wishes, and will receive assistance on our medical insurance. If she leaves work one month earlier, she has to wait until age 62 minimum to draw on her pension and receives no discount on insurance. The fact that she is retiring years ahead of most, waiting a few more months is a huge incentive to wait.

    On a positive note, since I am in my early 50’s I have the SS locked up with the number of quarters I have worked. (My wife does too) Finally – something good about getting and being older. 🙂

    • Steve says:

      Yup, it’s always wise to make sure that the money that has been set aside in your name is still yours even if you retire super early. We nearly made that mistake.

      Thanks for reading!

  7. Leigh says:

    I’ve been keeping an eye on the number of quarters I have for Social Security. I need to work through the end of 2019 to have enough to get it when I retire! Speaking of Social Security, I will finish paying into it with my end of month October paycheck! That’ll give me an “extra” $1,300 or so to pad my savings accounts at the end of the year. That’s always a nice little bonus for the last few months of the year.

    • Steve says:

      Hey Leigh – amen to that! Nothing wrong with a little bonus at the end of the year, that’s for sure. Extra money to invest. Extra money to grow! 🙂

  8. I just looked at my account to see if I have enough credits, and apparently I do! Apparently starting work at 15 on the books was a smart move! I would definitely work the extra two months to get there if I had to.

  9. Mrs SSC says:

    That is really great that you caught that ahead of time! We are both safe – I think we are a few years older than you. But, its great you are writing about it – I don’t think I’ve ever seen that mentioned in the FIREosphere thus far!

    • Steve says:

      Thanks Mrs. SSC – I haven’t heard much about it either, honestly, so thought that I’d write about it. Glad I did, and even more glad that we discovered this potential problem before it became one!

      Thanks for reading, as always! 🙂

  10. Jack says:

    Interesting. My career is advanced enough that this isn’t a concern, and I hadn’t given it any thought. When it comes to Social Security, I’m more worried about the macroeconomic risks, like will something consuming 26% of the government budget and rising still be solvent in 20 years, and still be able to pay sufficient money with COLA to be a measurable contribution to my retirement income.

    I’m not holding my breath.

  11. They mailed me something similar not too long ago…basically the same thing, but I thought it was odd at the time. Definitely worth working a few more months to get some of that $$$ back…hopefully.

  12. Sam says:

    Just found your site and have been reading through it. Like the content 😊. I looked up my credits and was surprised I had enough given I’m a gov’t employee and don’t really pay into it b/c of my pension. But, I’m curious how much the amount we receive will shrink from retiring early.

    • Steve says:

      Hey Sam – yeah, it’s tough to estimate the benefits after so many years of unemployment. Luckily, we won’t need SS when the time comes, so anything that we do get will just be icing on the cake. 🙂

  13. […] darn good salaries in a very low cost of living area. Once we retire towards the end of 2016 and beginning of 2017, it would have been about two years since we made the decision to retire […]

  14. […] Courtney will be retiring February 15th, 2017, about a week before her 31st birthday, in order to qualify for social security later in […]

  15. Stevie Wonders says:

    Note that it also takes 40 credits to qualify for Medicare, otherwise you must pay, and it ain’t cheap. I would consider qualifying for Medicare to be potentially more valuable than the Social Security.

  16. […] wife, on the other hand, has already told her boss that she’s quitting in February. She needed to give her boss that much notice due to the nature of the business that she’s […]

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