Income

The 3 Different Types of Social Security Benefits

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Social Security is an essential social safety net program in the U.S. It was established in 1935 to help elderly citizens during the Great Depression. However, it has since expanded to include other types of benefits, too.

There are three main types of Social Security benefits:

  • Retirement Benefits: This provides financial support for individuals who have reached retirement age and have sufficient work history.
  • Disability Benefits: These benefits provide financial assistance to individuals who cannot work due to a disability (and have worked in the past).
  • Survivors Benefits: Eligible dependents can receive financial support when a deceased worker with a work history dies.

This article will cover these specific types of benefits. However, we’ve also written about other Social Security topics, which you can view on our Social Security hub.

Retirement Benefits

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Many people look forward to retirement and often rely partially on Social Security to make it happen.

Retirement benefits are easily the most well-known form of Social Security.

To qualify for them, you must meet two main criteria:

  • Age: You can begin receiving Social Security benefits as early as 62, but your benefits will be lowered. Preferably, you should retire at full retirement age based on your birth year. You can also wait until after full retirement age for an increased monthly benefit. Your benefits increase monthly until the age of 70.
  • Work History: You must have a minimum work history, measured in “work credits.” You need 40 credits, which is ten years of work.

The Social Security Administration calculates your monthly benefit based on your average indexed earnings. Only your top 35 years are used in the calculation. Higher lifetime earnings translate to a higher monthly benefit. We have another guide that gives a comprehensive look at how Social Security works, if you’re interested in all the details.

When you retire has a big impact on your monthly benefit, too. Here’s a quick rundown of the different possibilities:

  • Full Retirement Age: Your full retirement age is when you can begin receiving your full benefit. This age depends on your birth year, and you can use the retirement age calculator to find it.
  • Delayed Retirement Credits: If you delay your retirement past full retirement age, you can increase your monthly benefit slightly each month. This increase ends at 70, though. You do not receive any more credits for waiting past 70.
  • Reduced Benefits: If you retire before full retirement age, your monthly benefit will be permanently reduced. It does not increase when you reach full retirement age, as you have to stretch the same amount of money over a longer period.

Disability Benefits

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While the SSA has a list of qualifying disabilities, technically, any disability can qualify if you can prove its severity.

Social Security Disability Insurance provides financial assistance if you cannot work due to a severe disability. This disability must be expected to last at least one year or result in death. There are also two requirements to receive these benefits:

  • Work History: You must have a sufficient work history to receive disability benefits. You must also have done some of that work recently. However, the exact number of work credits required depends on the age at which you became disabled.
  • The Severity of Disability: You must be disabled enough to prevent yourself from performing the work you did previously. It must also significantly limit your ability to perform other kinds of work. The Social Security Administration lists disabilities that may prevent you from qualifying for benefits. However, your disability doesn’t have to fall on this list. You simply have to prove that your disability is serious enough.

There are two types of disability benefits, with Social Security Disability Insurance (as discussed above) being only one type. It’s for workers who have previously worked and paid Social Security taxes.

However, there is another disability insurance run by the Social Security Administration called Supplemental Security Income. This program provides financial assistance to disabled people without a sufficient work history. For instance, anyone born disabled would fall into this category.

This supplemental income is typically lower than the benefits provided by SSDI.

Applying to receive disability benefits can be complicated and long. It typically involves submitting notes from your doctor, medical documentation, and evaluations of your abilities. Then, you must wait for a discussion from the Social Security Administration (and appeal their decision if you are first turned down).

There is a very high denial rate, so workers must often repeal the decision.

 Survivors Benefits

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Children often qualify for Social Security benefits if one of their parents passes away with sufficient work history. However, the exact amount can vary.

Survivors’ benefits provide monthly payments to eligible dependents of deceased workers. The deceased worker must have worked and received some work credits. However, the exact number depends on the worker’s age when they passed away.

Several types of people may qualify for these benefits:

  • Spouses: A surviving spouse 60 or older can often receive benefits. Younger spouses may also qualify if they are caring for a child under 16, disabled, or caring for a disabled child. The exact benefits also depend on the spouse’s age and other factors.
  • Children: Unmarried children of deceased workers may also qualify for benefits if they are younger than 18, full-time students 19 or younger, or disabled before they turn 22. Again, the exact percentage of benefits you receive depends on your age and specific circumstances.
  • Other Dependents: Sometimes, other dependents may be able to receive benefits. For instance, dependent parents who are at least 62 and received significant support from the deceased worker may be eligible. Dependent grandchildren who meet the requirements of children above often also qualify.

Receiving survivor’s benefits can be complicated, as many specifics are involved. Your exact age, living situation, work situation, and relationship to the deceased all matter. For instance, a disabled spouse between 50 and 59 can receive 71.5% of the deceased worker’s benefit. The numbers and ages are all very specific.

You can view the exact percentages on the Survivors Benefits page of the Social Security website.

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