I am nearing retirement age, and hoping to collect Social Security once I reach full retirement age (FRA). I have worked for a few years recently, but never had a full-time job before that. I have never been disabled. How will I know whether I have earned enough income subject to Social Security tax to collect benefits when I retire?
In order to be eligible to receive Social Security benefits, you need to accumulate 40 work credits. According to the Social Security Administration, "In 2013, you receive one credit for each $1,160 of earnings, up to the maximum of four credits per year." Each year, the amount of earnings required for a credit is adjusted based on nationwide average earnings. An individual with 10 years of work, earning at least 4 quarters worth of the minimum income required per year, will earn 40 credits and be eligible for benefits.
While an individual cannot earn more credits above $4,640 in a year, the amount of benefits is based on full earnings for the year. Essentially, while higher income cannot lead to more than 4 credits, it will lead to higher benefits once an individual becomes eligible and begins to collect. As is the case with our other posts on the topic of Social Security, individuals who are disabled, survivors, dependent children, and others in special circumstances may fall under other guidelines.
Source: Social Security: Retirement Benefits