Understanding how Social Security credits work is essential if you’re planning for retirement in the United States. These credits are the foundation of your eligibility for benefits, and knowing how to earn them helps you stay on track toward future financial security. In 2024, every $1,730 you earn counts as one credit, with a maximum of four credits allowed each year. So, earning $6,920 in a year gets you the full set of annual credits, no matter how much more you make.
To qualify for retirement benefits, you’ll need a total of 40 credits—usually earned over a 10-year period. But it’s not just about working 10 years; your benefits are based on your 35 highest-earning years. If you don’t work for a stretch, those years count as zero, which can lower your benefit amount. Unfortunately, many people—like long-term homemakers, older immigrants, or government employees in non-covered positions—don’t end up earning enough credits through standard employment.
However, there are ways to bridge the gap if you’re short on credits. Working longer or delaying retirement can help. If you’re divorced and meet certain conditions, you might qualify for benefits through your ex-spouse. Immigrants from countries with totalization agreements may combine credits between countries. And in cases of disability or death, Social Security may still provide support through other benefits, such as SSDI or survivor benefits for family members.
How Much Do You Need to Earn for One Social Security Credit?
Social Security is a central part of retirement for many Americans, and understanding how the system tracks your eligibility is important. Social Security credits are the building blocks that determine if and when you’ll qualify for benefits. In 2024, you’ll earn one credit for every $1,730 of income from work that is taxed for Social Security. The system limits you to four credits per year, which means once you make $6,920 in the year, you’ve earned the full four credits—regardless of how much more you earn after that.
Why the 40-Credit Rule Is Key
To receive Social Security retirement benefits, most people need to have earned 40 credits over their lifetime. That typically translates to at least 10 years of work. But it’s not just about meeting the minimum. The Social Security Administration calculates your benefit based on your 35 highest-earning years. If there are years when you didn’t work or earned very little, those will be counted as zero, which can bring down your average and lower your monthly benefit.
When Earning Credits Is a Challenge
Not everyone finds it easy to accumulate 40 credits. Some people—particularly immigrants—may not have enough work history in the U.S. to qualify. In fact, nearly half of those who never receive Social Security benefits are older immigrants. Another 38.9% are individuals who spent extended periods out of the workforce, often for personal reasons like raising children.
Others are excluded from the Social Security system altogether. Around 10.8% of non-beneficiaries work in positions not covered by Social Security, such as certain state or local government jobs. These workers may still receive a pension through their job, even if they don’t qualify for Social Security. The same goes for railroad employees with at least 10 years of service, who are covered under a separate system called the Railroad Retirement Board.
Unfortunately, there’s also a small group—about 1.3%—who pass away before they’re old enough to begin claiming benefits, which isn’t allowed before age 62.
Options If You’re Short on Credits
If you’re close to earning 40 credits but haven’t reached the threshold yet, working a little longer or delaying your retirement can help you reach the minimum. For those who are divorced, there’s also the possibility of receiving benefits through an ex-spouse’s work record—provided the marriage lasted at least 10 years and you haven’t remarried.
Immigrants from countries that have a totalization agreement with the U.S.—a type of international deal to coordinate Social Security benefits—may be able to combine credits from both countries to qualify. In most of these cases, you’ll need at least six credits from U.S. work.
Finally, even if you can’t continue working due to a health issue, you may still qualify for Social Security Disability Insurance (SSDI). Additionally, survivor benefits may be available to spouses and children if the primary worker passes away before or after reaching retirement age.
