6 Key Questions You Should Ask About Social Security

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How Is Eligibility Determined?

Your eligibility is determined based on the credits you earn during your years as a worker. This year, for every $1,410 you make, you earn one credit, up to a maximum of 4 every single year. If you were born in 1929 or later, you need 40 credits—or, in other words, 10 years of full-time work— in order to receive Social Security benefits in your retirement.

“Once you have these minimum credits, your benefit is based on your highest 35 years of averaged earnings,” says Michael Windle, a financial advisor at C. Curtis Financial Group in Plymouth, Mich. “If you only worked 20, you would have 15 years of zero income.”

Unfortunately, for those workers who spent a significant period of time unpaid at home, caring for their children or elderly parents, this formula comes with a huge disadvantage.

There are special provisions that can actually change the formula if you had specific public service jobs. “For citizens who have government-sponsored pensions, like teachers, firefighters, police officers, or other public employees, there is a high probability that your Social Security benefits are reduced or even eliminated,” says Mark Hebner, founder, and president of Index Fund Advisors, Inc., in Irvine, Calif.

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