With a rapidly growing aging population, securing Social Security funds is now more crucial than ever. But how did we get here in the first place? USA TODAY


The Social Security Administration doesn't just give away benefits at random. Rather, the monthly benefit you're entitled to in retirement will be calculated by taking your average monthly wage, adjusted for inflation, over your 35 highest-paid years in the workforce, and then applying that number to a special formula. But you're only entitled to a retirement benefit if you earn enough work credits in your lifetime. And next year, those credits will be more difficult to earn.

Social Security's work credits: your ticket to benefits

In order to collect Social Security as a senior, you'll need 40 work credits in your lifetime. The maximum number of credits you can earn in a single year is four, regardless of what your income looks like. That said, there's an income threshold that must be met to qualify for these credits that changes from year to year.

In 2020, you're entitled to one work credit per $1,410 of earnings. This means that as long as you earn $5,640, you can max out your four credits for the year.

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In 2021, however, you'll need more earnings to snag a credit: $1,470 instead of $1,410. That means you'll need earnings of $5,880 to get your four work credits.

For many people, hitting this income level won't be a problem. But if you work on a part-time basis only, it could hurt your ability to collect Social Security later in life.

What to do if you don't earn enough to claim your four credits

You need a total of 40 work credits to be eligible for Social Security based on your own earnings history, so if you have a few years when you don't earn your four credits in full, that's not necessarily something to worry about. Say you've had a baby and are only going back to work on a very limited part-time basis while you care for your child. Even if you miss out on work credits for a year or two, you still have plenty of time to compensate. In fact, if you have 10 years during which you max out your four credits, you'll be set.

Of course, the more money you earn, the higher your benefit will be. But for many people, earning 40 work credits over time won't be a problem. You could conceivably take a decades-long break from the workforce and still have no problem accumulating your 40 credits.

That said, if you're right on the cusp of earning those credits, you may want to try to boost your income to get over that threshold. For example, if you're in line to earn $5,000 in 2021, you may want to ask for extra work or hours to bump yourself up to $5,880. 

Another thing you should know is that even if you don't manage to secure enough work credits throughout your time in the workforce to qualify for Social Security benefits in retirement, you may be entitled to money from the program nonetheless. If you're married to someone who's entitled to benefits, or are divorced from someone who's eligible, you could be in line for spousal benefits, which will pay you up to 50% of what your spouse or ex-spouse collects.

In fact, in this way, Social Security really does a good job of protecting people who opt out of the workforce to be caregivers (or for other reasons). And while boosting your earnings as much as possible is always a good idea, if you don't manage to do so to the point where you get your credits, it doesn't mean you won't be in line for any money when you're older.

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