Social Security comes with a lot of terminology, but understanding a few common terms can make retirement planning much easier.
Here are some of the words and phrases you are most likely to come across when reviewing your benefits or speaking with a Registered Social Security Analyst® (RSSA®).
Full Retirement Age
Your Full Retirement Age, often shortened to FRA, is the age when you can receive your full retirement benefit without a reduction for claiming early.
For people born in 1960 or later, Full Retirement Age is 67. For earlier birth years, it falls somewhere between age 66 and 67.
Claiming Age
Your claiming age is simply the age when you choose to begin receiving Social Security retirement benefits.
You can generally begin retirement benefits as early as age 62. Claiming before Full Retirement Age reduces your monthly benefit, while waiting beyond Full Retirement Age can increase it up to age 70.
Primary Insurance Amount
Your Primary Insurance Amount, or PIA, is the basic monthly benefit amount used to calculate your Social Security retirement benefit.
In simple terms, it is the amount you would receive if you begin retirement benefits at your Full Retirement Age.
Earnings Record
Your earnings record is the history of wages and self-employment income Social Security has recorded for you over the years.
This record is important because Social Security uses your covered earnings when calculating your retirement benefit.
Social Security Credits
Social Security credits help determine whether you have worked long enough to qualify for certain benefits.
Most workers need 40 credits to qualify for retirement benefits, and a maximum of four credits can be earned each year. The amount of earnings needed to earn a credit changes over time.
Early Claiming
Early claiming means beginning Social Security retirement benefits before reaching your Full Retirement Age.
Starting early gives you access to benefits sooner, but your monthly retirement benefit is generally reduced because you are claiming before Full Retirement Age.
Delayed Retirement Credits
Delayed retirement credits increase your retirement benefit when you wait beyond Full Retirement Age to begin receiving benefits.
These increases continue until age 70. Waiting beyond age 70 does not provide additional delayed retirement credits.
Spousal Benefits
Spousal benefits may allow someone to receive Social Security based partly on a current spouse’s work record.
Eligibility and benefit amounts depend on several factors, including age, the spouse’s benefit record, and when benefits are claimed.
Divorced-Spouse Benefits
In certain situations, someone who is divorced may qualify for Social Security benefits based on a former spouse’s work record.
Rules such as the length of the marriage and current marital status can affect eligibility.
Survivor Benefits
Survivor benefits may be available to certain family members after someone who worked and paid Social Security taxes dies.
Depending on the circumstances, benefits may be available to a surviving spouse, former spouse, children, or other eligible family members.
Dependent Benefits
Children and some other dependents may qualify for Social Security benefits based on a parent’s work record.
These benefits can sometimes apply when a parent retires, becomes disabled, or dies.
Earnings Test
The earnings test may affect someone who begins receiving retirement benefits before Full Retirement Age and continues working.
If earnings exceed the annual limit, Social Security may temporarily withhold some benefits. Once Full Retirement Age is reached, the earnings test no longer applies.
Cost-of-Living Adjustment
A Cost-of-Living Adjustment, commonly called a COLA, is an adjustment that may increase Social Security benefits to account for changes in consumer prices.
COLAs help benefits keep pace with inflation over time.
Benefit Estimate
A benefit estimate is an approximation of the Social Security benefit you may receive based on your current earnings record and certain assumptions about future earnings and claiming age.
Your personal my Social Security account provides benefit estimates at different claiming ages.
Claiming Strategy
A claiming strategy is the approach you take to deciding when and how to begin Social Security benefits.
For an individual, that may involve comparing different claiming ages. For a married couple or family, it may also involve considering spousal, survivor, or dependent benefits.
There is no single claiming strategy that works for everyone.
Lifetime Benefits
Lifetime benefits refers to the total amount of Social Security benefits someone may receive over time rather than looking only at the monthly payment.
Comparing estimated lifetime benefits can help show how different claiming choices may affect the amount received throughout retirement.
my Social Security Account
A my Social Security account is a secure personal account provided by the Social Security Administration.
It can be used to review your earnings history, see benefit estimates, access your Social Security Statement, and manage certain Social Security services online.
Always access your account directly through the official Social Security Administration website at SSA.gov.
RSSA®
A Registered Social Security Analyst®, or RSSA®, is a professional who has completed specialized Social Security education and passed a competency exam.
RSSAs help individuals and families understand Social Security rules, review different claiming options, and see how those options may apply to their individual circumstances.
You Do Not Need to Know All of This Before Getting Started
Social Security terminology can seem complicated at first, but there is no need to memorize every term.
Understanding a few basics can make it easier to review your benefits, ask questions, and follow the different options available to you. An RSSA® can help explain the details and put them into context based on your own situation.
