Many people wonder what happens to their Social Security benefits if they haven’t worked enough in their lifetime. The Social Security program requires people to work and pay into the system for at least 10 years (40 credits) to be eligible for retirement benefits. But what if you haven’t worked at all or haven’t worked for 35 years? Here’s a look at how that can impact your Social Security benefits.
Social Security Basics
Social Security is a social insurance program run by the federal government that provides benefits to retired and disabled workers, their spouses, survivors and dependents. To qualify for benefits, you must earn Social Security “credits” by working and paying Social Security taxes on your earnings.
In 2023, you earn one credit for every $1,640 in income, up to the maximum of four credits per year. So if you earn $6,560 or more in 2023, you max out at four credits. You need 40 credits lifetime to qualify for retirement benefits. These credits remain on your Social Security record even if you don’t work for long periods.
Your benefit amount is based on your highest 35 years of earnings that were subject to Social Security taxes. Each year you worked adds to your benefit. If you have less than 35 years of earnings, zeros are averaged in for the years you did not work, which drags down your average and results in a lower benefit amount.
If You Haven’t Worked for 35 Years
If you haven’t worked at all or haven’t worked for 35 years, here’s how it impacts your Social Security benefit:
No Work History
If you have not worked at all or earned zero Social Security credits, you will not qualify for retirement benefits under your own record when you reach age 62 or older. However, you may still qualify for spousal benefits under your spouse’s work record (if they qualify for Social Security) or survivor benefits as a widow/widower.
Less Than 10 Years of Work
If you worked for less than 10 years (earned less than 40 credits), you will not qualify for any Social Security retirement benefits under your own record. Again, you may qualify for spousal or survivor benefits.
10 Years of Work, But Less Than 35
If you worked more than 10 years, earning at least 40 credits, but less than 35 years, you can qualify for retirement benefits. However, your benefit amount will be lower compared to someone who worked for 35+ years.
For each year under 35 that you did not work, a zero will be averaged into your benefit calculation, bringing down your average earnings. This results in a permanently reduced benefit amount.
For example, if you worked 20 years, you would have 20 years of actual earnings and 15 zeros averaged in, resulting in a lower monthly benefit amount.
Worked Long Enough to Qualify, But Have Gaps in Recent Years
Your benefit is based on your highest 35 years of earnings. So even if you have worked enough years in your lifetime to qualify for benefits, having zero earnings in recent years can still reduce your benefit amount.
For example, if you earned consistently for 30 years but have not worked at all for the last 5 years before filing for benefits, those zero earning years will bring down your overall average.
Some Examples
Here are some examples to illustrate how not working for 35 years can impact Social Security benefits:
Jane
– Worked 13 years total
– Earned 52 credits (over the 40 required)
– Has 23 years with zero earnings
Jane qualifies for benefits because she exceeds the minimum 40 credits. However, her benefit will be permanently reduced compared to someone with 35+ years of earnings because zeros are averaged in for the 23 years she did not work.
John
– Worked 20 years consecutively
– Has not worked for the last 15 years
– Has 20 years of actual earnings and 15 zeros
John also qualifies for benefits since he worked over 10 years. But having 15 zeros averaged in reduces his benefit amount compared to if he had worked 35+ years with no gaps.
Michelle
– Worked 5 years and earned 20 credits
– Has not worked for the last 30 years
Michelle does not have enough credits to qualify for Social Security retirement benefits on her own record since she only worked 5 years. She earned below the required 40 credits.
Strategies to Increase Benefits
If you have not worked consistently for 35 years or have large gaps in your work history, here are some tips that may help boost your future Social Security benefits:
Earn Additional Credits
If you are short of the 40 lifetime credits needed to qualify for benefits, continue working to earn additional credits. Just a few more years of work could help you qualify.
Delay Claiming Benefits
For those who qualify but have reduced benefits due to years of zero earnings, delaying when you claim benefits can help. Your benefits grow by a certain percentage each year (depending on your birth year) up until age 70. So waiting to claim can help counteract the effect of having zero earnings for many years.
Coordinate Spousal Benefits
If your spouse qualifies for higher Social Security benefits than you, consider strategies like “claim now, claim more later” where the higher earning spouse claims early so the other spouse can immediately claim a spousal benefit. The lower earning spouse then switches to their own increased benefit later.
Continue Working
If you are able to, continuing to work before claiming Social Security can boost your future benefit. Each additional year of earnings that is higher than one of the 35 years already being accounted for will increase your average earnings. Working just a bit longer, even part-time, can make a difference.
Other Things to Consider
Here are a few other things to keep in mind if you have not worked for 35 years:
– Look into your full retirement age. This is the age when you qualify for unreduced Social Security benefits based on your earnings history. It varies from age 66 to 67 depending on your birth year. Claiming earlier than this age results in a permanently reduced benefit.
– Factor in spousal and survivor benefits if applicable. These can provide income even if you have not worked enough yourself. Make sure to coordinate strategies with your spouse.
– Look into SSI or disability benefits if you cannot work due to medical reasons and have limited income and assets.
– Create a retirement plan that relies on other sources of income beyond Social Security, such as retirement savings, pensions, and part-time work. Having little or no Social Security will impact your retirement planning.
– Consider your Medicare coverage options at age 65. Medicare does not require you to qualify for Social Security benefits, but enrollment rules vary if you do not have Social Security.
Conclusion
If you haven’t worked for 35 years, it can significantly impact your Social Security retirement benefits. You need at least 10 years of work to qualify, but having less than 35 years of earnings will result in a reduced benefit amount. Strategies like delaying claiming or earning extra credits before filing can help increase your benefits. For those who have not worked enough to qualify on their own record, spousal and survivor benefits may be available. Knowing how a lack of lifetime earnings affects Social Security can allow you to make a retirement plan that provides you with the income you need.