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In both cases, the benefit you can claim is known as your primary insurance income (PIA)
The regular Social Security benefit is designed for the average income earner, while the special minimum Social Security benefit is intended for lower-income citizens.
Each is calculated differently.
For most of us, Social Security benefits are calculated for retirement based on our lifetime earnings.
The Social Security Administration (SSA) calculates your benefits based on the 35 highest-earning years of your career.
The special minimum Social Security benefit calculation is based on years of service rather than lifetime earnings.
A year of service refers to any year in which you contributed a certain minimum amount to Social Security.
The ultimate PIA for which you qualify increases with every year of service (up to a maximum of 30 years).
The terms “special minimum Social Security benefit” and “minimum Social Security benefit” are often used interchangeably because they refer to the same thing.
The special minimum Social Security benefit is intended for lower-income individuals as a means to afford them a higher PIA than they would otherwise be eligible for.
As mentioned, it is calculated based on years of service rather than lifetime earnings.
You must have at least 11 (and up to 30) years of coverage to be eligible for the special minimum Social Security benefit.
You acquire a year of coverage by earning a certain minimum amount of earnings within that year.
If you are a low-income individual, you can choose between the regular Social Security benefit and the special minimum Social Security benefit.
Interestingly, low-income workers on the higher end of the spectrum are increasingly opting for the regular PIA.
This is because the regular PIA may actually still pay out more than the special minimum PIA, thanks to adjustments not keeping up with the ever-increasing impact of inflation on retirement.
The youngest age at which you can begin claiming the minimum Social Security benefit is 62.
In 2024, the special minimum Social Security benefit for retirees at age 62 will be around $2,710.00 per month.
However, it’s important to note that this amount depends on your years of coverage and increases the longer you wait to begin claiming.
How much you will get from special minimum Social Security depends on two things:
The special minimum PIA is periodically increased to adjust for the increased cost of living.
You can determine the PIA you currently qualify for by consulting the latest PIA table published by the Social Security Administration.
What if you choose not to retire early?
If you are 70 years old (or older) in 2024 and have the maximum 30 coverage years, you are eligible for the highest possible special minimum PIA of $4,873.00 per month.
Your Social Security benefits are a vital component of your retirement plan, particularly if you have been a long-term low-income worker.
If you plan correctly, you could be eligible for a special minimum Social Security benefit of up to $4,873.00 per month in 2024.
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